Optimal service levels in multi-item inventory systems

In this paper, exact mathematical models are formulated for different and more general demand and delivery patterns than was previously handled in the literature. The different models of demand and delivery, which have been considered in the program package developed for a Hungarian steel works, are described first. Then two mathematical models are presented for the optimal coordinated choice of the service levels and reference is given to their exact solution. Approximations are derived for the practical application of the mathematical models which are based on asymptotic distributions. Finally, the questions of error approximation and the practical application are discussed.