The effect of lead time and demand uncertainties in (r, q) inventory systems

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2010-01-01

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Abstract

We study a single-item (r, q) inventory system, where r is the reorder point and q is the order quantity. The demand is a compound-Poisson process. We investigate the behavior of the optimal policy parameters and the long-run average cost of the system in response to stochastically shorter or less-variable lead times. We show that although some of the properties of the base-stock system can be extended to this more general model, some cannot. The same findings also apply when the comparison is conducted on the lead-time demand distributions. © 2010 INFORMS.

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10.1287/opre.1090.0711

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Song, JS, H Zhang, Y Hou and M Wang (2010). The effect of lead time and demand uncertainties in (r, q) inventory systems. Operations Research, 58(1). pp. 68–80. 10.1287/opre.1090.0711 Retrieved from https://hdl.handle.net/10161/4432.

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Song

Jing-Sheng Song

R. David Thomas Distinguished Professor of Business Administration

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