Safety stocks and the order quantity that leads to the minimal stock

DOI10.1016/S0377-2217(86)80005-4MaRDI QIDQ1820665zbMATH OpenOpenAlexFDO

Authors B. van der Veen

Publication date 1986

Published in European Journal of Operational Research (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/s0377-2217(86)80005-4

zbMATH Keywords

out of stock probabilitysafety-stock

Mathematics Subject Classification ID

Numerical mathematical programming methods (65K05) Inventory, storage, reservoirs (90B05)

Review text

In this sequel to earlier papers, attention has been paid to the out of stock probability \(\alpha\). For practical applications a flow diagram is given as a resumé of the different approaches that cover the whole range \(n=(\mu /\sigma)^ 2\geq 0.25\), where \(\mu\) and \(\sigma\) are the expected value and the standard deviation of the demand in the lead time. As the physical stock is a convex function of the order quantity Q, the value of Q is determined by which the stock is minimal. A simple approximation leads to an optimal Q that is only a function of n and \(\sigma\). This theoretical approach is very practical, because 'high inventories' is a main problem in industry.

Recommendations

• Safety stocks and the paradox of the empty period
• Determining Safety Stock in the Presence of Stochastic Lead Time and Demand
• On a stochastic extension of the EOQ formula
• On the calculation of safety stocks when demand is forecasted
• scientific article; zbMATH DE number 502878

Cites work

• Generation of Bessel Functions on High Speed Computers
• Safety stocks and the paradox of the empty period

Cited in

(2)

• Determining Safety Stock in the Presence of Stochastic Lead Time and Demand
• Safety stocks and the paradox of the empty period

This page was built for publication: Safety stocks and the order quantity that leads to the minimal stock

Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q1820665)