The effect of lead time and demand uncertainties in (r, q) inventory systems

Journal Article (Journal Article)

We study a single-item (r, q) inventory system, where r is the reorder point and q is the order quantity. The demand is a compound-Poisson process. We investigate the behavior of the optimal policy parameters and the long-run average cost of the system in response to stochastically shorter or less-variable lead times. We show that although some of the properties of the base-stock system can be extended to this more general model, some cannot. The same findings also apply when the comparison is conducted on the lead-time demand distributions. © 2010 INFORMS.

Full Text

Duke Authors

Cited Authors

  • Song, JS; Zhang, H; Hou, Y; Wang, M

Published Date

  • January 1, 2010

Published In

Volume / Issue

  • 58 / 1

Start / End Page

  • 68 - 80

Electronic International Standard Serial Number (EISSN)

  • 1526-5463

International Standard Serial Number (ISSN)

  • 0030-364X

Digital Object Identifier (DOI)

  • 10.1287/opre.1090.0711

Citation Source

  • Scopus