On the (S-1,S) model for renewal demand processes: Poisson's poison
Probability in the Engineering and Informational Sciences , Volume 11 p. 375- 386
In the standard (S - 1,S) stock model, demand follows a Poisson process. It has appeared to many stock analysts that this model causes an abundance of stock in reality. In case demand is caused by failure or is derived from another process, demand typically does not follow a Poisson process. In this paper, we discuss the (S - 1,S) stock model where demand follows a renewal process and the lead time is deterministic. Morover, we will extend this to compound renewal demand and multi-echelon inventory systems. Our goal is to show the severe influence of taking the Poisson process for granted.
|inventory theory, logistics|
|Probability in the Engineering and Informational Sciences|
|Organisation||Erasmus MC: University Medical Center Rotterdam|
Smith, M.A.J, & Dekker, R. (1997). On the (S-1,S) model for renewal demand processes: Poisson's poison. Probability in the Engineering and Informational Sciences, 11, 375–386. Retrieved from http://hdl.handle.net/1765/2241