Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
482818 | European Journal of Operational Research | 2006 | 12 Pages |
Abstract
To model demand, the normal distribution is by far the most popular; the disadvantage that it takes negative values is taken for granted. This paper proposes two modifications of the normal distribution, both taking non-negative values only. Safety factors and order-up-to-levels for the familiar (R, S)-control system are derived and compared with the standard values corresponding with the original normal distribution. The main conclusion is that generally standard safety factors should be increased—often rather sizably; otherwise the attained service level may fall short considerably.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
L.W.G. Strijbosch, J.J.A. Moors,