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Computation of order and volume fill rates for a base stock inventory control system with heterogeneous demand to investigate which customer class gets the best service

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Abstract

We consider a base stock inventory control system serving two customer classes whose demands are generated by two independent compound renewal processes. We show how to derive order and volume fill rates of each class. Based on assumptions about first order stochastic dominance we prove when one customer class will get the best service. That theoretical result is validated through a series of numerical experiments which also reveal that it is quite robust.

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  • Larsen, Christian, 2006. "Computation of order and volume fill rates for a base stock inventory control system with heterogeneous demand to investigate which customer class gets the best service," CORAL Working Papers L-2006-03, University of Aarhus, Aarhus School of Business, Department of Business Studies.
    • Handle: RePEc:hhb:aarbls:2006-003
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    1. Melchiors, Philip, 2003. "Restricted time-remembering policies for the inventory rationing problem," International Journal of Production Economics, Elsevier, vol. 81(1), pages 461-468, January.
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    4. Hausman, Warren H. & Lee, Hau L. & Zhang, Alex X., 1998. "Joint demand fulfillment probability in a multi-item inventory system with independent order-up-to policies," European Journal of Operational Research, Elsevier, vol. 109(3), pages 646-659, September.
    5. P Melchiors & R Dekker & M J Kleijn, 2000. "Inventory rationing in an (s, Q) inventory model with lost sales and two demand classes," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 51(1), pages 111-122, January.
    6. Kaj Rosling, 2002. "Inventory Cost Rate Functions with Nonlinear Shortage Costs," Operations Research, INFORMS, vol. 50(6), pages 1007-1017, December.
    7. Vinayak Deshpande & Morris A. Cohen & Karen Donohue, 2003. "A Threshold Inventory Rationing Policy for Service-Differentiated Demand Classes," Management Science, INFORMS, vol. 49(6), pages 683-703, June.
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    Cited by:

    1. Kjeldsen, Karina Hjortshøj, 2008. "Classification of routing and scheduling problems in liner shipping," CORAL Working Papers L-2008-06, University of Aarhus, Aarhus School of Business, Department of Business Studies.

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