The sensitivity of (Q, S) inventory model

Christian N Madu

Omega, 1988, vol. 16, issue 1, 61-64

Abstract: This paper tests the sensitivity of the (Q, S) inventory model to errors in both the lot size and the backorder size. The sensitivity of the model to the shape of the holding cost curve and the backorder cost curve is also tested. The result shows that the model is more sensitive to lot size error than to the backorder error. Under certain conditions, errors in backorder size become costly. The (Q, S) inventory model is also sensitive to both the shape of the holding cost and backorder cost curves. The (Q, S) model expressed using a nonlinear cost function is presented, of which other well known inventory models are shown to be special cases. The managerial implications of this paper are discussed.

Date: 1988
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