Abstract
This paper deals with a periodic review inventory system. Methods are discussed for determining the re-order point s of an (s, S) order policy, when a certain service level is required. The results differ from those presented for a (Q, s) model which is usually considered in literature and implemented in practice. Methods are discussed for determining the re-order point of an (s, S) policy when demand is normal or gamma distributed. A numerical investigation demonstrates the applicability of the described methods. In particular, it is shown that these methods are superior to a formula that is implemented in many inventory control systems.
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Schneider, H. Methods for Determining the Re-order Point of an (s, S) Ordering Policy when a Service Level is Specified. J Oper Res Soc 29, 1181–193 (1978). https://doi.org/10.1057/jors.1978.262
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DOI: https://doi.org/10.1057/jors.1978.262