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Methods for Determining the Re-order Point of an (s, S) Ordering Policy when a Service Level is Specified
The Journal of the Operational Research Society
Vol. 29, No. 12 (Dec., 1978), pp. 1181-1193
Stable URL: http://www.jstor.org/stable/3009583
Page Count: 13
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This paper deals with a periodic review inventory system. Methods are discussed for determining the re-order point s of an (s, S) order policy, when a certain service level is required. The results differ from those presented for a (Q, s) model which is usually considered in literature and implemented in practice. Methods are discussed for determining the re-order point of an (s, S) policy when demand is normal or gamma distributed. A numerical investigation demonstrates the applicability of the described methods. In particular, it is shown that these methods are superior to a formula that is implemented in many inventory control systems.
The Journal of the Operational Research Society © 1978 Operational Research Society