Computing Expected Values of Customer Requests Backordered

Alan J. Kaplan
Additional contact information
Alan J. Kaplan: AMC Inventory Research Office, Philadelphia, Pennsylvania

Management Science, 1971, vol. 17, issue 9, 647-651

Abstract: Suppose that the stockout cost for a supplier is a function of the number of customer requests backordered, each request possibly being for several units of stock of a product. The problem arises of computing the expected number of customer requests backordered. when techniques are available for computing the expected number of units backordered. A simple conversion factor is desirable. Based on a formal analysis, the conversion factor 1/E(X) is recommended where E(X) is average size of a customer request. This conclusion is contrary to that reached in previously published research. Analysis is extended to the case where backorder cost is time weighted; i.e., backordered sales are not lost, and the cost of a backorder depends on the time elapsing before the customer request is finally satisfied.

Date: 1971
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.17.9.647 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:17:y:1971:i:9:p:647-651

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().