The joint effect of leadtime variance and lot size in a parallel processing environment

Journal Article (Journal Article)

We study a basic (r, q) system, in which the demand is a Poisson process and the leadtimes are independent, identically-distributed random variables. The key issue is the joint effect of the leadtime variance and the lot size q on performance. We know that, under a simple base-stock policy (with q = 1), the leadtime variance has no effect at all. We find here that, for larger q, the leadtime variance can have a significant adverse impact on performance. To explore this effect, we test two simple approximations. The simplest ignores the leadtime variance. The second approach is only a bit more complex; it captures the variance effect through a hybrid of two limiting approximations. Both methods provide useful information, but the second is more robust.

Full Text

Duke Authors

Cited Authors

  • Song, JS; Zipkin, PH

Published Date

  • January 1, 1996

Published In

Volume / Issue

  • 42 / 9

Start / End Page

  • 1352 - 1363

International Standard Serial Number (ISSN)

  • 0025-1909

Digital Object Identifier (DOI)

  • 10.1287/mnsc.42.9.1352

Citation Source

  • Scopus