Advanced Search
MyIDEAS: Login to save this article or follow this journal

On the exact calculation of the fill rate in a periodic review inventory policy under discrete demand patterns

Contents:

Author Info

  • Guijarro, Ester
  • Cardós, Manuel
  • Babiloni, Eugenia
Registered author(s):

    Abstract

    The primary goal of this paper is the development of a generalized method to compute the fill rate for any discrete demand distribution in a periodic review policy. The fill rate is defined as the fraction of demand that is satisfied directly from shelf. In the majority of related work, this service metric is computed by using what is known as the traditional approximation, which calculates the fill rate as the complement of the quotient between the expected unfulfilled demand and the expected demand per replenishment cycle, instead of focusing on the expected fraction of fulfilled demand. This paper shows the systematic underestimation of the fill rate when the traditional approximation is used, and revises both the foundations of the traditional approach and the definition of fill rate itself. As a result, this paper presents the following main contributions: (i) a new exact procedure to compute the traditional approximation for any discrete demand distribution; (ii) a more suitable definition of the fill rate in order to ignore those cycles without demand; and (iii) a new standard procedure to compute the fill rate that outperforms previous approaches, especially when the probability of zero demand is substantial. This paper focuses on the traditional periodic review, order up to level system under any uncorrelated, discrete and stationary demand pattern for the lost sales scenario.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/pii/S0377221711010344
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal European Journal of Operational Research.

    Volume (Year): 218 (2012)
    Issue (Month): 2 ()
    Pages: 442-447

    as in new window
    Handle: RePEc:eee:ejores:v:218:y:2012:i:2:p:442-447

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/eor

    Related research

    Keywords: Inventory; Fill rate; Periodic review; Discrete demand; Lost sales;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Tempelmeier, Horst, 2007. "On the stochastic uncapacitated dynamic single-item lotsizing problem with service level constraints," European Journal of Operational Research, Elsevier, Elsevier, vol. 181(1), pages 184-194, August.
    2. Silver, Edward A. & Bischak, Diane P., 2011. "The exact fill rate in a periodic review base stock system under normally distributed demand," Omega, Elsevier, vol. 39(3), pages 346-349, June.
    3. Cardós, Manuel & Babiloni, Eugenia, 2011. "Exact and approximate calculation of the cycle service level in periodic review inventory policies," International Journal of Production Economics, Elsevier, Elsevier, vol. 131(1), pages 63-68, May.
    4. George J. Feeney & Craig C. Sherbrooke, 1966. "Correction to "(s - 1, s) Inventory Policy Under Compound Poisson Demand"," Management Science, INFORMS, INFORMS, vol. 12(11), pages 908-908, July.
    5. Matthew J. Sobel, 2004. "Fill Rates of Single-Stage and Multistage Supply Systems," Manufacturing & Service Operations Management, INFORMS, INFORMS, vol. 6(1), pages 41-52, June.
    6. John A. Muckstadt & L. Joseph Thomas, 1980. "Are Multi-Echelon Inventory Methods Worth Implementing in Systems with Low-Demand-Rate Items?," Management Science, INFORMS, INFORMS, vol. 26(5), pages 483-494, May.
    7. G. J. Feeney & C. C. Sherbrooke, 1966. "The (S - 1, S) Inventory Policy Under Compound Poisson Demand," Management Science, INFORMS, INFORMS, vol. 12(5), pages 391-411, January.
    8. Tamer Boyaci & Guillermo Gallego, 2001. "Serial Production/Distribution Systems Under Service Constraints," Manufacturing & Service Operations Management, INFORMS, INFORMS, vol. 3(1), pages 43-50, June.
    9. de Kok, A. G., 1990. "Hierarchical production planning for consumer goods," European Journal of Operational Research, Elsevier, Elsevier, vol. 45(1), pages 55-69, March.
    10. Johansen, Soren Glud, 2005. "Base-stock policies for the lost sales inventory system with Poisson demand and Erlangian lead times," International Journal of Production Economics, Elsevier, Elsevier, vol. 93(1), pages 429-437, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:218:y:2012:i:2:p:442-447. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.