Reorder quantities for (Q,R) inventory models

B C Vasconcelos and M P Marques
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B C Vasconcelos: University of Porto
M P Marques: University of Porto

Journal of the Operational Research Society, 2000, vol. 51, issue 5, 635-638

Abstract: Abstract The reorder level R and the reorder quantity Q are the parameters to be decided in a continuous review inventory policy. Their optimal values can be approached through iterative methods, but these are tedious and inconvenient for control routines. A frequent practice is to set Q as the economic reorder quantity and compute R accordingly. Yet this practice may introduce a substantial cost penalty. The paper re-arranges conventional theoretical expressions in order to facilitate the use of numerical approximations to help find a quasi-optimal solution. This approach is then applied to Gamma distributed demands showing that computations are straightforward.

Keywords: inventory control; stochastic processes; reorder quantities (search for similar items in EconPapers)
Date: 2000
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DOI: 10.1057/palgrave.jors.2600933

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