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Exact and approximated calculation of the cycle service level in a continuous review policy

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  • Cardós, Manuel
  • Babiloni, Eugenia

Abstract

The paper proposes a method to compute the exact cycle service level for (s, Q) continuous review policy in the presence of undershoots and discrete demand in the discrete time domain. Prior to this, it is necessary to review the definition of the cycle service level in order to avoid the problems that can be found when applied it to the periodic review policy. Therefore, the aim of this paper is: (a) to review the definitions of the cycle service level when applied to continuous review policies; (b) to develop an exact calculation method of the CSL for a continuous review policy when undershoots are allowed and demand is discrete; and (c) to examine some common believes about the cycle service properties. Finally, the bias obtained when the service cycle level is estimated applying the common assumption of neglecting undershoots at the order point is illustrated with some numerical examples which show that it may lead to significant deviations to be ignored.

Suggested Citation

  • Cardós, Manuel & Babiloni, Eugenia, 2011. "Exact and approximated calculation of the cycle service level in a continuous review policy," International Journal of Production Economics, Elsevier, vol. 133(1), pages 251-255, September.
    • Handle: RePEc:eee:proeco:v:133:y:2011:i:1:p:251-255
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    References listed on IDEAS

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    1. M Cardós & C Miralles & L Ros, 2006. "An exact calculation of the cycle service level in a generalized periodic review system," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(10), pages 1252-1255, October.
    2. Vereecke, Ann & Verstraeten, Peter, 1994. "An inventory management model for an inventory consisting of lumpy items, slow movers and fast movers," International Journal of Production Economics, Elsevier, vol. 35(1-3), pages 379-389, June.
    3. Snyder, R. D., 1984. "Inventory control with the gamma probability distribution," European Journal of Operational Research, Elsevier, vol. 17(3), pages 373-381, September.
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    Cited by:

    1. Chia-Nan Wang & Thanh-Tuan Dang & Ngoc-Ai-Thy Nguyen, 2020. "A Computational Model for Determining Levels of Factors in Inventory Management Using Response Surface Methodology," Mathematics, MDPI, vol. 8(8), pages 1-23, July.
    2. Disney, Stephen M. & Gaalman, Gerard J.C. & Hedenstierna, Carl Philip T. & Hosoda, Takamichi, 2015. "Fill rate in a periodic review order-up-to policy under auto-correlated normally distributed, possibly negative, demand," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 501-512.
    3. Dreyfuss, Michael & Giat, Yahel, 2019. "Allocating spares to maximize the window fill rate in a periodic review inventory system," International Journal of Production Economics, Elsevier, vol. 214(C), pages 151-162.

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