Optimization of Periodically Reviewed Inventory Systems

Periodically reviewed inventory systems are of particular interest of coordinated multi-level supply chains, where it would be unsound from an organisational perspective to place and fulfil orders at arbitrary points in time.
In particular, we examine the periodical-review order-up-to (r,S)-policy with backorders, i.e. we place a replenishment order every r periods that raises the inventory position to the level S, where the inventory position equals the physical stock plus stock on order minus backordered demand. We assume that demand is static stochastic and use different stochastic lead time models.

 

The aim of research is to develop analytical formulas or computational routines to calculate performance measures that are commonly used to monitor and adjust inventory systems, i.e. the fill rate, the distribution of customer order waiting times or the average inventory levels. Those formulas and proceeds are then used to construct methods to improve or even optimize the performance of inventory systems that justify the assumptions outlined above. We examine both single and multi level systems.

Tool

A simulation tool to analyze periodic-review inventory policies can be downloaded here.

 SPIP - Tool
 SPIP - Tool Manual

Publications

Kuhn, H. and Wensing T., Calculation of customer waiting times in a periodic-review inventory system, in: International Sixth International Conference on Analysis of Manufacturing Systems, May 11-16, 2007, Lunteren, Netherlands, S.173-178

Kuhn, H. and Wensing T., Abschätzung des zyklischen Alpha-Servicegrads einer (r,S)-Lagerhaltungspolitik bei stochastischer Wiederbeschaffungszeit, in: Günther, H.O., Mattfeld, D., Suhl L. (Hrsg.): Management Logistischer Netzwerke  Entscheidungsunterstützung, Informationssysteme und OR-Tools, Physica, Heidelberg, 2007, S.201-220