Applying Non-Parametric Methods for Calculating and Analyzing Inventory Reorder Points to Miitary Supply Systems with Stochastic Demands and Fixed or Variable Lead Times
Abstract
This paper develops and applies a nonparametric bootstrap methodology for setting inventory reorder points and a simple inequality for identifying existing reorder points that are unreasonably high. We demonstrate that an empirically-based bootstrap method is both feasible and calculable for large inventories by applying it to the 1st Marine Expeditionary Force General Account, an inventory consisting of $20-30 million of stock for 10-20,000 different types of items. Further, we show that the bootstrap methodology works significantly better than the existing methodology based on mean days of supply. In fact, we demonstrate performance equivalent to the existing system with a reduced inventory at one-half to one- third the cost; conversely, we demonstrate significant improvement in fill rates and other inventory performance measures for an inventory of the same cost.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 24, 1999
- Accession Number
- ADA380267
Entities
People
- Christopher A. Goodhart
- Ronald D. Fricker Jr.
Organizations
- RAND Corporation