Abstract
In this note we shall deal with a continuous review (r, Q) inventory control system. Demands for a single product item occur at epochs generated by a Poisson process, and the replenishment lead time has a truncated normal distribution. We shall derive expressions for the demand probabilities during lead times based on exact expressions for ‘tail moments’ of the standard normal distribution. The program for finding an optimal reorder point r and an optimal order quantity Q under service level constraints is solved numerically.
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