In this chapter we discuss inventory systems where several demand classes may be distinguished. In particular, we focus on single-location inventory systems and we analyse the use of a so-called critical level policy. With this policy some inventory is reserved for high-priority demand. A number of practical examples where several demand classes naturally arise are presented, and the implications and modelling of the critical level policy in distribution systems are discussed. Finally, an overview of the literature on inventory systems with several demand classes is given.

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Econometric Institute Research Papers
Erasmus School of Economics

Kleijn, M., & Dekker, R. (1998). An overview of inventory systems with several demand classes (No. EI 9838). Econometric Institute Research Papers. Retrieved from