Open AccessThe Effect of Lead Time and Demand Uncertainties in (r, q) Inventory Systems
Author(s) -
Jing-Sheng Song,
Hanqin Zhang,
Yumei Hou,
Mingzheng Wang
Publication year - 2009
Publication title -
operations research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.797
H-Index - 140
eISSN - 1526-5463
pISSN - 0030-364X
DOI - 10.1287/opre.1090.0711
Subject(s) - lead time , reorder point , poisson distribution , poisson process , stock (firearms) , order (exchange) , lead (geology) , lost sales , computer science , variable (mathematics) , economic order quantity , econometrics , operations research , mathematics , economics , statistics , operations management , business , supply chain , mechanical engineering , finance , marketing , geomorphology , engineering , geology , mathematical analysis
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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