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Crossover aware base stock decisions for service-driven systems

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  • Chatfield, Dean C.
  • Pritchard, Alan M.

Abstract

We investigate the impact of order crossover on a periodic, order-up-to (R,S) inventory system where attaining a target service level is the focus. We first address two crossover related assumptions and then explore five methods of including crossover information into the process of determining the order-up-to level (S). We develop a hybrid discrete-event/continuous simulation model and perform a full-factorial simulation study under various conditions of target service level, demand variance, and lead-time variance. We find the method used to include crossover information into the decision significantly impacts service performance and that methods based on effective lead-time observations perform best.

Suggested Citation

  • Chatfield, Dean C. & Pritchard, Alan M., 2018. "Crossover aware base stock decisions for service-driven systems," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 312-330.
    • Handle: RePEc:eee:transe:v:114:y:2018:i:c:p:312-330
    DOI: 10.1016/j.tre.2017.12.013
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