Single-Echelon Systems: Reorder Points

Sven Axsäter ()
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Sven Axsäter: Lund University

Chapter 5 in Inventory Control, 2015, pp 65-105 from Springer

Abstract: Abstract We shall now consider different techniques for determining reorder points, or equivalently safety stocks, when the demand is a stationary stochastic process. To do this we first of all need a suitable demand model. In practice the demand during a certain time is nearly always a nonnegative integer, i.e., it is a discrete stochastic variable. (Exceptions may occur when we deal with products like oil.) Provided that the demand is reasonably low, it is then natural to use a discrete demand model, which resembles the real demand. However, if the demand is relatively large, it may be more practical to use a continuous demand model as an approximation. See Sect. 5.2. As before it is assumed that individual items can be controlled separately.

Keywords: Service Level; Inventory Level; Fill Rate; Safety Stock; Stochastic Demand (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/978-3-319-15729-0_5

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