AN ITERATIVE ANALOG INVENTORY POLTCY COST MODEL

SUMMARY This article describes the use of an analog computer, operating in the iterative mode, to perform simulations of inventory policy situations. The inventory policies studied are the re-order level, re-order cycle and (s, S) policies, and within each of these inventory policies a replenishment order policy of either a fixed or variable type can be operated. All policies are subject to stochastic sized customer demand and lead-time durations and a cost model is developed to compare the operating costs of the various policies under these conditions. This cost model is used further to investigate in some detail the self-adaptability and the optimal character of the (s, S) policy.