Inventory Systems

Marc Goetschalckx ()
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Marc Goetschalckx: Georgia Institute of Technology

Chapter Chapter 10 in Supply Chain Engineering, 2011, pp 431-493 from Springer

Abstract: Abstract In traditional inventory systems the typical decisions involve the determination of the level of service to be provided, the frequency of or time between replenishments R, the order up to level S which determines how much to order, and the reorder point s which determines when in the cycle the order is placed. Depending on the conditions and assumptions of the inventory system, these values can be either parameters or variables and this has created many different types of inventory control policies. An inventory control policy is considered “optimal” if it minimizes the long-range or average total system cost. While this long-range average cost differs significantly from industry to industry and from product to product, 25% of the product value is often used as a first order approximation of the average cost for holding a product in inventory for 1 year.

Keywords: Supply Chain; Service Level; Inventory Level; Order Quantity; Inventory Policy (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-1-4419-6512-7_10

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DOI: 10.1007/978-1-4419-6512-7_10

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