An Analysis of Air Force EOQ Data with an Application to Reorder Point Calculation

C. R. Mitchell, R. A. Rappold and W. B. Faulkner
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C. R. Mitchell: U.S. Air Force Logistics Management Center, Gunter Air Force Station, Alabama
R. A. Rappold: Titan Systems Inc., Colorado Springs, Colorado
W. B. Faulkner: U.S. Air Force Logistics Management Center, Gunter Air Force Station, Alabama

Management Science, 1983, vol. 29, issue 4, 440-446

Abstract: One of the important uses of an EOQ item's distribution of lead time demand is to set its reorder point. This paper shows that a realistic model of observed demand patterns can be chosen from the compound Poisson family of distributions. Actual historical data from several U.S. Air Force bases are analyzed using the geometric-Poisson and constant-Poisson distributions. The control discipline is order quantity, reorder point with continuous review. The service level is based on percent of demand supplied during lead time and is consistent with current USAF methodology. The reorder point is based on independent calculations and no attempt is made to jointly optimize the order quantity and reorder point. Lead time is assumed to be known and constant.

Keywords: inventory/production: applications; inventory/production: approximations; inventory/production: parameter estimation (search for similar items in EconPapers)
Date: 1983
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Citations: View citations in EconPapers (6)

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