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# lec5 - IE221 Operations Research Probabilistic Methods...

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1 Tue, 11 Sep 2000 IE221: Lecture 5 1 IE221: Operations Research – Probabilistic Methods Module I: Inventory Models Lecture 5, Fall 2001 Lehigh University IMSE Department Tue, 11 Sep 2000 IE221: Lecture 5 2 Lecture 5 Outline Service Level Approaches ! Introduction + an example ! Finding r for SLM1 + example ! Finding r for SLM2 + example Periodic Review Model ! The (R,S) Policy + example

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Tue, 11 Sep 2000 IE221: Lecture 5 3 Service Level Measures ! Service Level Measure 1 (SLM1) is the expected fraction of all demand that is met on time. ! Service Level Measure 2 (SLM2) is the expected number of cycles per year during which shortage occurs. Tue, 11 Sep 2000 IE221: Lecture 5 4 Example: Elasticine I The average annual demand for bungee cords from Elasticine is 1000 and the EOQ is 100. Demand during a lead time is random and is described by the probability distribution to the left. For a reorder point of 30 units, determine SLM1 and SLM2. 2/10
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lec5 - IE221 Operations Research Probabilistic Methods...

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