Comparison of ( s, S) and ( s, nQ) inventory control rules with respect to planning stability

Abstract

The application of a rolling horizon planning framework in inventory control causes different order release decisions in successive planning cycles. These lead to the so-called planning system nervousness. In this paper for a single-stage inventory system with arbitrary stochastic demand it is shown analytically how the setup-oriented planning stability concerning deviations of planned orders in all periods of a given stability horizon is influenced by the use of ( s, S) and ( s, nQ) control rules. It turns out that the reorder point s does not affect stability whereas the lot size determining parameters S− s and Q as well as the level of uncertainty have a considerable impact. The paper is concluded with directions for further research.