Inventory control with variation in lead times, especially when demand is intermittent

Abstract This paper presents a model for inventory control where variation in lead times is allowed. No reorder point is computed. The mean value and the variance for the time between withdrawals, the order size and the lead time are measured by exponential smoothing. These variables are assumed to be Gamma distributed. Together with the constants: the inventory on hand plus on-order, passed time since the last withdrawal and time to the next inspection; the probability for a shortage is calculated. If the probability is greater than the service level requires then a replenishment order must be placed.

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