Impact of Using Non-Optimal Reorder Points.
ARMY LOGISTICS MANAGEMENT CENTER FORT LEE VA
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A steady state inventory system with an R,Q type ordering policy, Poisson demand, and fixed lead times is considered. It is formally shown that the cost of ordering one time at asset level R1 rather than asset level R2 is equal to the difference in average cost per cycle of always ordering at R1 versus always ordering at R2. This is true regardless of when future orders are placed. Areas to which this result has practical application are identified. Author
- Logistics, Military Facilities and Supplies
- Administration and Management
- Economics and Cost Analysis