Modified normal demand distributions in (R, S)-inventory control

Modified normal demand distributions in (R, S)-inventory control

0.00 Avg rating0 Votes
Article ID: iaor20083561
Country: Netherlands
Volume: 172
Issue: 1
Start Page Number: 201
End Page Number: 212
Publication Date: Jul 2006
Journal: European Journal of Operational Research
Authors: ,
Keywords: statistics: distributions, service
Abstract:

To model demand, the normal distribution is by far the most popular; the disadvantage that it takes negative values is taken for granted. This paper proposes two modifications of the normal distribution, both taking non-negative values only. Safety factors and order-up-to-levels for the familiar (R, S)-control system are derived and compared with the standard values corresponding with the original normal distribution. The main conclusion is that generally standard safety factors should be increased – often rather sizeably; otherwise the attained service level may fall short considerably.

Reviews

Required fields are marked *. Your email address will not be published.