The goal of this paper is to examine whether, in Q-system inventory control policy, a combination of the reorder point exceeding order quantity leads to minimal holding and ordering costs when dealing with sporadic demand. For this purpose, a past stock movement simulation is applied to a set of randomly generated data with different numbers of zero demand periods ranging from 10 to 90%. The outputs of the simulation prove that in situations where stock holding costs are too high, the simulation tends to reduce average stock by overcoming periods between two demand peaks with an increase in the numbers of small replenishment orders and reaches lower stock holding and ordering costs. Furthermore, the correlation analysis proves that there is a statistically significant relationship (r = .847, p = .004) between the number of time series that reach minimal holding and ordering costs under the control of reorder point (replenishment order) and the demand standard deviation affected by the evolving sporadicity. These findings can support decision making linked with inventory management of products with sporadic demand and contribute to development of business information systems.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
customersupport@researchsolutions.com
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.