Patent Document ID: 6144945
Application ID: 08892620
Patent Flag: 1

Claim One:
1. 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; and when 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.