A safety stock adjustment procedure to enable target service levels in simulation of generic inventory systems

C. Koehler Gudum, A.G. Kok, de

Research output: Book/ReportReportAcademic

547 Downloads (Pure)

Abstract

The aim of this paper is to present a technique, called the safety stock adjustment procedure (SSAP), which enables the determination of safety stocks that ensure target service levels in simulation studies of inventory systems. The technique is based on a netting procedure constructed so that the net requirement process and the replenishment process are independent of the safety stock and that the inventory process satisfies an invariance relation. The procedure is presented for three kinds of service measures; namely the cycle service level, the fill rate and the ready rate. In a numerical example the benefits of using the safety stock adjustment procedure are shown. In this example three wellknown lot size models are compared assuming stochastic and time-varying demand. Moreover, we propose the safety stock adjustment procedure to be used in practical situations to set safety stock levels in companies for instance when demand is nonstationary. Keywords:
Original languageEnglish
Place of PublicationEindhoven
PublisherTechnische Universiteit Eindhoven
Number of pages30
ISBN (Print)90-386-1717-8
Publication statusPublished - 2002

Publication series

NameBETA publicatie : working papers
Volume71
ISSN (Print)1386-9213

Fingerprint

Dive into the research topics of 'A safety stock adjustment procedure to enable target service levels in simulation of generic inventory systems'. Together they form a unique fingerprint.

Cite this