Joint demand fulfillment probability in a multi-item inventory system with independent order-up-to policies

Joint demand fulfillment probability in a multi-item inventory system with independent order-up-to policies

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Article ID: iaor19992789
Country: Netherlands
Volume: 109
Issue: 3
Start Page Number: 646
End Page Number: 659
Publication Date: Sep 1998
Journal: European Journal of Operational Research
Authors: , ,
Abstract:

We consider a multi-term inventory system with dependent item demands represented by a multivariate normal distribution and filled under a First-Come-First-Served rule. Each item is managed independently through a periodic review order-up-to policy while all items have the same review cycle. We obtain the joint demand fulfillment probability within a pre-specified time window. We also study the problem of maximizing the joint demand fulfillment probability and discuss a heuristic approach in which equal safety factors (equal fractiles) are specified for all items. Finally we present numerical results and an application with actual data.

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