Inventory Systems

Chapter
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 161)

Abstract

In traditional inventory systems the typical decisions involve the determination of the level of service to be provided, the frequency of or time between replenishments R, the order up to level S which determines how much to order, and the reorder point s which determines when in the cycle the order is placed. Depending on the conditions and assumptions of the inventory system, these values can be either parameters or variables and this has created many different types of inventory control policies. An inventory control policy is considered “optimal” if it minimizes the long-range or average total system cost. While this long-range average cost differs significantly from industry to industry and from product to product, 25% of the product value is often used as a first order approximation of the average cost for holding a product in inventory for 1 year.

Keywords

Transportation Polyethylene Gasoline Lost 

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.H. Milton Stewart School of Industrial & Systems EngineeringGeorgia Institute of TechnologyAtlantaUSA

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