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Title: | The concept of semi-variance as a tool for safety inventory decisions in case of uncertain demand | Authors: | RAMAEKERS, Katrien Merkuryeva, Galina JANSSENS, Gerrit K. |
Issue Date: | 2017 | Publisher: | Eurosis-ETI Publication | Source: | Gonçalves, Paulo J.S. (Ed.). Proceedings of the European Simulation and Modelling Conference (ESM '2017), Eurosis-ETI Publication,p. 201-205 | Abstract: | An inventory system containing uncertainty, e.g. in demand or in lead-time requires to determine a safety inventory for re-ordering. The decision models need a probability distribution of the demand during lead-time. In the literature on inventory control, mostly a Normal distribution for describing this demand is assumed. Based on the knowledge of the variance and on the distribution assumption, the safety inventory is calculated, given a prescribed customer service level. However, the functional form of the probability distribution in practice might look different from the shape of a Normal distribution and by this wrong decisions are made which result in high costs or low service level. It is investigated here whether the use of semi-variance is more robust to a deviation in the shape from the Normal distribution. The determination of the safety inventory is worked out for a triangular distribution as an illustrative example. | Keywords: | inventory management; safety inventory; semi-variance | Document URI: | http://hdl.handle.net/1942/26010 | ISBN: | 9789492859006 | Category: | C1 | Type: | Proceedings Paper | Validations: | vabb 2021 |
Appears in Collections: | Research publications |
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