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Browsing by Subject "order point"

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    Item type:Article, Access status: Open Access ,
    Verification of a service level estimation method
    (AGH University of Science and Technology Press, 2009) Okulewicz, Józef
    Fluctuations of supply and demand require that supplementary stock be maintained which would support satisfying the demand even with temporarily delayed supplies. It has become a common practice that what is known as the safety stock serves as a reserve until the next supply arrives. However, the importance of this deviation source has been exaggerated enormously and thus it has to be verified.The paper presents a statistical model which has served as a basis for a formula for computing the safety stock, as well as formulae for computing service level, in the two ways used. Then a simulation model follows supporting the determination of customer service level. It has been proved that the service level is a better tool for estimating the safety stock protecting against random fluctuations of supply and demand.