Abstract
The current investigation identifies the means of setting up a theoretical safety stock and determines the order point in an ordering point system that includes the distribution of lead times. In actual inventory control, changing the lead time does occur and is not considered a fixed value. However, for a conventional investigation in which the lead time is treated as fixed, a large change in lead time may result in excessive safety stock, causing increased inventory problems. A change in lead time, which can be described by a discrete probability distribution, can be incorporated into a theoretical computation of safety stock by including the change in quantity demanded. A direct calculation of standard deviation is proposed, and the effective range is checked by numerical simulation. In the current investigation, the numerical simulation showed the following : (1) The proposed safety stock that satisfies the theoretical modulus of allowance deficiency has been established; (2) The proposed form cuts inventory cost performance, as compared with the conventional form; and, (3) The proposed form makes smaller inventory changes than the conventional form/operative. The above shows that the proposed form was effective in determining the safety stock in the event of a changing lead time, and for the calculation of an order point. The significance of computing a theoretical safety stock for the conditions of a changing lead time and the value of an estimated order point are as follows : (1) The excess inventory drawback for the safety stock estimate calculated by conventional form when there is a large change in lead time was improved; (2) Effectively sets a target for a shortened lead time, because in many cases a shortened lead time is difficult to attain; and, (3) By preparing for dynamic lead times, cuts in the inventory cost performance, such as average propensity to save, can be enlarged.
