Determination of Optimal Safety Stock Policies

Show simple item record Najdawi, Mohammad K. en_US Liberatore, Matthew J. en_US
date.accessioned 2009-11-25T12:41:35Z en_US
date.available 2009-11-25T12:41:35Z en_US
date.issued 2006 en_US
identifier.citation Studies of Business and Economics, 2006, Vol. 12, No. 1, Pages 25-34. en_US
identifier.uri en_US
description.abstract Setting safety stock policies are especially important in the management of retail and wholesale inventories, as well as stores, spare parts, supply items, and in certain areas of production planning. From a practical perspective, determining the optimal safety stock policy and the optimal service level requires specifying the demand distribution. This paper develops optimal safety stock policies under several commonly used statistical demand distributions; normal, exponential, andpoisson. In those situations where a manager has limited information on the shape of the demand distribution, Chebychev's Inequality Theorem is exploited to determine the optimal policies. The suggested computational approach enables the order quantity and the number of standard deviations that specifies the service level to be jointly determined by minimizing total relevant cost. A numerical example is also given to illustrate the computational process. en_US
language.iso en en_US
publisher Qatar University en_US
subject Safety Stock Policy en_US
title Determination of Optimal Safety Stock Policies en_US
type Article en_US
identifier.pagination 25-34 en_US
identifier.issue 1 en_US
identifier.volume 12 en_US

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