Abstract
In practice of inventory management customer-oriented service measures play an important role. If inventory managers of stockpoints in a supply chain promise specific times of delivery that cannot be met due to a lack of stock, leadtimes at downstream stockpoints increase, causing substantial adverse effects on customer satisfaction. Hence, it is of considerable interest to understand the trade-off between safety stock and customer waiting time. In this paper, we investigate this waiting time in an ( R , s , Q ) inventory system under compound renewal demand. We provide an approximation for the distribution function of the customer waiting time and we determine the minimal reorder level subject to a maximum average waiting time. In a numerical study we test the performance of our approximation. Moreover, we investigate the effects of the performance of the waiting time in case the underlying demand process is indeed a compound renewal, while a discrete time model is used.
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