Inventory Management and Production Planning and Scheduling¶
Silver, E. A., & Pyke. (1998). Inventory Management and Production Planning and Scheduling. John Wiley & Sons.
Cited by¶
1 citation across 1 artifact.
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Domain-specific¶
- Service Level
- The implication is non-linear: the resource required to move from a 95% to a 99% service level is much larger than the resource required to move from 90% to 95%, because each increment reaches further into a heavier tail of the demand distribution
This sourceThe safety-factor relation behind the sentence - reserve scales with the standard-normal quantile of the target service level - which is what makes each further increment of service cost disproportionately more. The standard treatment of inventory service levels, with the reorder policies, single-period models and safety-stock functions the bullet names set out as the field's working machinery. The safety-stock rule the worked figures apply: reserve equals the standard-normal quantile at the target cycle service level times the standard deviation of lead-time demand.
- The implication is non-linear: the resource required to move from a 95% to a 99% service level is much larger than the resource required to move from 90% to 95%, because each increment reaches further into a heavier tail of the demand distribution
Verification¶
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