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Inventory and Supply Chain

1 tool in the Operations Research area.

Inventory Policy

Lot sizes, reorder points and stocking levels from the classical inventory models, each with its equations written out and the substituted numbers: the economic order quantity with the cost curve and the cost of a rounded lot; EOQ with all-units quantity discounts from a pasted price schedule; the production lot (EPQ) and the planned-shortage model; the continuous-review (Q, r) policy with normal lead-time demand solved for a cycle service level, a fill rate through the standard normal loss function or a shortage cost by the iterated Hadley–Whitin procedure; the periodic-review (R, S) order-up-to level; the newsvendor critical ratio with expected sales, leftovers and profit for normal or pasted empirical demand; and an ABC classification with the Pareto table. Each model's example is a published one: Hillier and Lieberman's TV speaker case for the EOQ and planned-shortage models, Heizer and Render's Nathan Manufacturing and Wohl's Discount Store, Nahmias' Harvey's Specialty Shop for (Q, r), Chopra and Meindl's B&M case for (R, S), Cachon and Terwiesch's O'Neill wetsuit for the newsvendor and Heizer and Render's Silicon Chips for ABC. The page opens on the speaker example (Q* = 25,298 every 3.162 months).

8 worked examples reproduced, listed on the tool page.

Other Operations Research sections

Optimization · Queueing and Simulation · Scheduling · Decision Analysis · Networks and Routing