An optimal inventory management for supply chain considering demand distortion

In the conventional inventory policy, the normal distribution approximates the real demand distribution. It is, however, not adequate since the real distribution has distortion. We have proposed an optimal inventory policy based on new demand model with the third order Gram-Charlier series expansion. The new demand model is an approximate normal distribution with the third cumulant. Simulation results show that the proposed method decreases the excess inventory and cost as compared with those of the conventional method.