Unformatted text preview: the order cycles. a) Find the resulting (Q,R) values. b) Suppose that, unfortunately, he really wanted to satisfy 90 percent of his demands (that is, achieve a 90 percent ﬁll rate). What ﬁll rate did he actually achieve from the policy determined in part (a). 4QA3 F12 A. Gandomi 21 ● Suppose that lead time (τ) has mean µ;τ and στ2. ● Also, suppose that demand in any time t has mean λt and variance ν2t . ● It can be shown that the demand during lead time has mean and variance: µ = λµτ
σ 2 = µτ ν 2 + λ 2σ τ2 4QA3 F12 A. Gandomi 22 ● One of the (Q,R) system was that inventory levels are reviewed continuously. ● In the case of periodic review, a slight alteration of (Q,R) policy is required. Deaine two levels, s < S, and let u be the starting inventory at the beginning of a period. Then: If u ≤ s, order S − u If u > s, don' t order ● In general, computing the optimal values of s and S is much more difaicult than computing Q and R. ● One can use this approximation: 4QA3 F12 s = R and S = R + Q
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 Spring '14
 Trigraph, A., Gandomi

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