Inventory control in environments with short lead times

Purpose – The objective of this study is to revise and enhance existing inventory control models in a way that allows them to be used more efficiently in environments with short lead times. Design/methodology/approach – A simulation approach has been chosen to assess the efficiency of the developed model. This simulation is based on randomly generated demand data with a compound Poisson type of distribution. Findings – Results from the simulation show that traditionally used inventory control methods fail to ensure that desired service levels are attained in environments with short lead times. The simulation also shows that, by using the developed model, the differences between desired and attained service levels can be reduced to fall within limits acceptable in practice.