Independent-DemandInventory幻灯片.pptVIP

Figure 15.8: Probability Distribution of Demand over Lead Time m = mean demand R = Reorder point s = Safety stock Reorder Point The reorder point is defined as: R = m + s where: R = reorder point m = mean lead time demand s = safety or buffer stock Using the normal distribution: s = zσ where: z = safety factor (from normal table) σ = standard deviation of lead time demand Thus: R = m + zσ Periodic Review System (1) Instead of reviewing continuously, we review the inventory position at fixed intervals. For example, the bread truck visits the grocery store on