Operating Characteristic Approximations for the Analysis of (s,S) Inventory Systems.
NORTH CAROLINA UNIV AT CHAPEL HILL GRADUATE SCHOOL OF BUSINESS ADMINISTRATION
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The operating characteristics of s,S inventory systems are often difficult to compute, making sensitivity analysis a tedious and often expensive undertaking. Approximate expressions for operating characteristics are presented with a view towards simplified sensitivity analysis. The operating characteristics under consideration are the expected values of Total cost per period, period-end inventory, period-end stockout quantity, replenishment cost per period, and backlog frequency. The approximations are obtained by using least-squares regression to fit simple functions to the operating characteristics of a large number of parameter settings. Accuracy to within a few percent of actual values is typical for most of the approximations. Potential uses of the approximations are illustrated for several idealized design problems. Author
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