MAS 2008 Proceeding

Effect of negative parameters in inventory models performance

Authors:   Miguel Cezar Santoro, Gilberto Freire


This paper presents a comparative study of four inventory models. Three of them are reactive ones, the Order Up to Maximum Inventory Level, Base Stock and Fixed Lot Size models which don?t use demand forecasting to quantify the acquisition decisions. One of them, referred as Requirement Planning, operates using demand forecast. The Requirement Planning and Base Stock models operate with minimal purchase order quantity parameter to improve their competitiveness. Reorder Level and Safety Stock parameters are permitted to be negative. Average operation cost per period is the performance measurement considered, restricted to a minimum service level. The analysis uses a search model jointly a simulator to optimize the parameters. The paper analyses the effects, in the relative models performance, of the negative parameters permission and the value of the Purchase Cost and effectuates a sensibility analysis by testing four different Service Levels .

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