| Author: | Greis, N. P. |
| Title: | Assessing service level targets in production and inventory planning |
| Journal: | Decision Sciences
1994 : VOL. 25;1, p. 15-40 |
| Index terms: | INVENTORY CONTROL PRODUCTION PLANNING RELIABILITY |
| Language: | eng |
| Abstract: | In production and stock planning, the relatioship between customer service, defined as the ability to meet demand for finished goods from in-stock inventory, and expected profits or expected costs can be represented by a simple reliability curve. The shape of this curve depends on the parameters of the demand process, specifically the expected level of demand standard deviation and correlation structure, as well as upon the capacities and initial state of the production and inventory system. A model is presented which explicitly determines this trade-off curve for a firm. The model is intended both as an operational model to aid managers in setting revenue and service targets which are compatible with the capacities and resources of the firm, and as a tool for exploring relationships between parameters of demand and constraints of production and invntory. |
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