Inventory management under stochastic lead times: A tutorial
Abstract
In this tutorial I covered the following topics: Distribution of stochastic lead times. Order cross-overs. Random sums of random numbers. EOQ safety stocks with stochastic lead times. Expected dynamic behaviour of the POUT policy with stochastic lead times drawn from a negative binomial distribution. POUT policy with stochastic lead times: When an arbitrary lead time distribution is based on empirical evidence (a posteriori). Open orders and sub-processes. The inventory and order distributions. OUT policy with stochastic lead times: Forecasting the lead time. The case of auto-correlated demand and correlated lead times.
This tutorial was also given at “Recent Advances in Supply Chain Forecasting: A Workshop in Memory of Professor John E. Boylan” on June 13th-14th 2024 at Lancaster University Business School, UK.