TY - GEN
T1 - Proposal of reorder point satisfying allowable shortage rate under limited demand information
AU - Takemoto, Yasuhiko
AU - Arizono, Ikuo
PY - 2011/1/1
Y1 - 2011/1/1
N2 - Reorder point determination is one of issues in inventory management. A reorder point is a trigger of timing in the replenishment. The reorder point is generally determined based on an allowable probability of stockout. The conventional design of the reorder point is frequently based on the assumption that demand is independently and identically distributed and then follows a normal distribution. In a real situation, it may be unbelievable that daily demand is identically distributed. Also, the assumption of normality for demand is not always appropriate. In this study, the decision procedure of the reorder point by using the limited demand information such as expectation and variance for demands is proposed. The reorder point meeting the specified allowable probability of stockout is derived by using some probability inequalities. Then, the usefulness of our proposal is shown through some numerical simulations.
AB - Reorder point determination is one of issues in inventory management. A reorder point is a trigger of timing in the replenishment. The reorder point is generally determined based on an allowable probability of stockout. The conventional design of the reorder point is frequently based on the assumption that demand is independently and identically distributed and then follows a normal distribution. In a real situation, it may be unbelievable that daily demand is identically distributed. Also, the assumption of normality for demand is not always appropriate. In this study, the decision procedure of the reorder point by using the limited demand information such as expectation and variance for demands is proposed. The reorder point meeting the specified allowable probability of stockout is derived by using some probability inequalities. Then, the usefulness of our proposal is shown through some numerical simulations.
KW - Allowable probability of stockout
KW - Inventory management
KW - Limited demand information
KW - Probability inequality
KW - Reorder point
UR - http://www.scopus.com/inward/record.url?scp=84923419178&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84923419178&partnerID=8YFLogxK
M3 - Conference contribution
AN - SCOPUS:84923419178
T3 - 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings
BT - 21st International Conference on Production Research
A2 - Krause, Tobias
A2 - Spath, Dieter
A2 - Ilg, Rolf
PB - Fraunhofer-Verlag
T2 - 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011
Y2 - 31 July 2011 through 4 August 2011
ER -