Evaluations of Approximations for Shortage Costs from Major Customers for a Single Period Inventory Model.
Abstract
A single period inventory model is considered for supporting an overhaul depot. Demand for any stocked item is assumed to come from several repair lines, each of which has a different demand distribution and unit shortage cost. An approximation for the expected shortage costs was proposed by McMasters. This thesis evaluates the accuracy of that approximation as well as two additional ones proposed by the author. For the case of independent Poisson distributions two of the approximations are shown to give the exact expected shortage costs. Simulations were needed to evaluate the accuracy of the approximation formulas for binomially and normally distributed customer demands. By imposing restrictions on the range of certain parameters, acceptable levels of accuracy can be achieved for the two approximations. The imposed restrictions leave sufficient freedom to then determine the optimal quantity to stock for a given item. Additional keywords include: computerized simulation; cost models; computer program. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1984
- Accession Number
- ADA152050
Entities
People
- W. F. Noeggerath
Organizations
- Naval Postgraduate School