Computation of order and volume fill rates for a base stock inventory control system with heterogeneous demand to investigate which customer class gets the best service

Christian Larsen ()
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Christian Larsen: Department of Business Studies, Postal: The Aarhus School of Business, Fuglesangs Allé 4, 8210 Aarhus V, Denmark, http://www.asb.dk/staff/bs/chl.aspx?page=%7B803EFF10-69F7-4C0F-AEE3-F7F410E4B6F2%7D

No L-2006-03, CORAL Working Papers from University of Aarhus, Aarhus School of Business, Department of Business Studies

Abstract: We consider a base stock inventory control system serving two customer classes whose demands are generated by two independent compound renewal processes. We show how to derive order and volume fill rates of each class. Based on assumptions about first order stochastic dominance we prove when one customer class will get the best service. That theoretical result is validated through a series of numerical experiments which also reveal that it is quite robust.

Keywords: Base stock policy; service measures; two customer classes; compound renewal processes (search for similar items in EconPapers)
Date: Written 2006-03-06
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