DESCRIPTION OF THE COMPUTER PROGRAM FOR AGGREGATE BASE STOCKAGE POLICY OF RECOVERABLE ITEMS,
Abstract
This Memorandum describes a computer program that calculates stock levels across a set of recoverable items, which are generally characterized by high unit cost and low demand. The inventory policy followed is to reorder a unit whenever one is demanded. The assumed demand distribution is stuttering Poisson. The distribution of response time is arbitrary since only the mean response time needs to be known. The technique of Bayesian inference is used for demand prediction. Some salient features of the program are: (1) It adopts an aggregate approach to stock policy. (2) It provides for setting the most efficient base stock level to satisfy a specified aggregate performance rating with the least investment, and for generating a single computer run of sets of efficient base stock levels corresponding to levels of aggregate performance. (3) For computers with small storage capacity, it reduces the problem size by categorizing items according to their past demands and cost characteristics. (4) Execution time for the program is relatively short. The operating procedure is applicable to the RAND installation of IBM 7040-7044 computers. The program /s written in FORTRAN IV (it is also available in FORTRAN II).
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 01, 1965
- Accession Number
- AD0615261
Entities
People
- Gabriele Michels
- John Lu
Organizations
- RAND Corporation