Abstract
This chapter analyzes the setup stability of inventory control rules of the (s, S) and (s, nQ) type in a single-stage production and inventory system with stochastic demand. These policies are applied within a rolling horizon schedule framework, and Jensen's concept (as introduced in Section 3.4.1) is used to measure setup stability. Besides examining the influence of external parameters such as the length of the so-called stability horizon1, the weighting of periods within this horizon, the demand uncertainty, or the accuracy of demand forecasts, the main goal of the analysis is to show the impact of lot-sizing parameters on setup stability. Moreover, the comparison of both inventory control rules with respect to setup stability is central to this investigation.
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