Estimating reorder points and other management science applications by bootstrap procedure

The bootstrap procedure proposed by B. Efron is a resampling method which has nice estimation properties. Thr authors believe that the method has many useful applications to areas in Operational Research OR and management science. In this paper, the bootstrap procedure is demonstrated in the context of estimating the lead-time demand distribution and reorder points for an inventory control system. Numerical investigation shows that the procedure performs very well in comparison with the exact distribution and with other methods when the daily demands are either independent or autocorrelated. It also compares favorably with the ordinary simulation and has a smaller standard error for estimating the reorder points.