Patent ID: 6144945
Filing Date: 2000-11-07
Classification: G06Q

Abstract:
A computer implemented method to derive fast and accurate performance measures of a periodic-review (s,S)-type inventory policy for large scale inventory systems, where s is a reorder point and S is an upper ordering limit comprising the steps of:inputting a plurality of inventory variables comprising mean demand/period, standard deviation of demand/period, lead time, review period length, holding cost/unit/period, shortage penalty/unit/period, ordering unit, fill rate, average cost/period, expected on-hand inventory, expected back order level, and safety stock level;computing an initial solution for (s,S) from said plurality of inventory variables and, using this initial solution for (s,S), entering a stochastic renewal processing loop in which an optimal (s,S) solution is computed; andwhen the optimal (s,S) solution is found, outputting the optimal (s,S) solution for controlling said inventory system where s controls when an order is placed and S controls an amount of inventory to be ordered.