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Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/9803

Title: On the choice of a demand distribution for inventory management models
Authors: RAMAEKERS, Katrien
JANSSENS, Gerrit
Issue Date: 2008
Publisher: INDERSCIENCE ENTERPRISES LTD
Citation: EUROPEAN JOURNAL OF INDUSTRIAL ENGINEERING, 2(4). p. 479-491
Abstract: An inventory system containing uncertainty, e.g., in demand, in costs, in lead time, or in supplied quantity or quality, needs a probability distribution of demand for reorder point models. In the literature on inventory control, many times reference is made to the Normal or Gamma distribution for describing the demand in the lead time. The Poisson distribution has been found to provide a reasonable fit when the demand is very low. However, information about the functional form of the probability distribution is often incomplete in practice. For example, it might be that only the first moments of the probability distribution are known. This incomplete information is a problem as the shape of the distribution is important in terms of the performance of inventory control. A procedure is described to determine shape characteristics when only the first two moments of the distribution of demand during the lead time are known, using a compound Poisson distribution and the Pearson chart. [Received 18 August 2006; Revised 15 November 2007; Accepted 11 February 2008]
Notes: [Ramaekers, Katrien; Janssens, Gerrit K.] Hasselt Univ, Transportat Res Inst, Diepenbeek, Belgium.
URI: http://hdl.handle.net/1942/9803
ISI #: 000266126000006
ISSN: 1751-5254
Category: A1
Type: Journal Contribution
Validation: ecoom, 2010
Appears in Collections: Research publications

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