Title: Weibull vs. normal distribution of demand to determine the safety stock level when using the continuous-review (S, s) model without backlogs

Authors: Riccardo Manzini; Riccardo Accorsi; Emilio Ferrari; Mauro Gamberi; Valentina Giovannini; Hoang Pham; Alessandro Persona; Alberto Regattieri

Addresses: Department of Industrial Engineering, University of Bologna, Viale Risorgimento 2, 40136 Bologna, Italy ' Department of Industrial Engineering, University of Bologna, Viale Risorgimento 2, 40136 Bologna, Italy ' Department of Industrial Engineering, University of Bologna, Viale Risorgimento 2, 40136 Bologna, Italy ' Department of Management and Engineering, University of Padua, Italy ' Department of Industrial Engineering, University of Bologna, Viale Risorgimento 2, 40136 Bologna, Italy ' Department of Industrial and Systems Engineering, Rutgers The State University of New Jersey, 96 Frelinghuysen Road, Piscataway, NJ 08855-8018, USA ' Department of Management and Engineering, University of Padua, Italy ' Department of Industrial Engineering, University of Bologna, Viale Risorgimento 2, 40136 Bologna, Italy

Abstract: Determining safety stock is one of the most critical issues in inventory and logistics management. This paper presents a cost-based analytical model to determine the best safety stock and customer service level for uncertain demand of products during generic replenishment lead times and a continuous-review inventory system. The proposed model uses the Weibull distribution to model the generic stochastic demand. α and β are the scale parameter and the shape parameter, respectively. An experimental analysis based on the assumption of different distributions of demand of product demonstrates the effectiveness of the proposed model compared to the so-called normal-based traditional model. Significantly, the proposed Weibull-based model is a comprehensible and user-friendly tool that can be useful for production system managers and practitioners.

Keywords: Weibull distribution; storage cost; inventory systems; inventory management; shortage cost; continuous review; safety stock levels; backlogs; customer service level; uncertain demand; uncertainty; replenishment lead times.

DOI: 10.1504/IJLSM.2016.076889

International Journal of Logistics Systems and Management, 2016 Vol.24 No.3, pp.298 - 332

Received: 23 Mar 2015
Accepted: 06 May 2015
Published online: 06 Jun 2016 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article