Abstract
Determining safety stock is one of the most critical issues in inventory and logistics management. This paper presents a cost-based analytical model to determine the best safety stock and customer service level for uncertain demand of products during generic replenishment lead times and a continuous-review inventory system. The proposed model uses the Weibull distribution to model the generic stochastic demand. α and β are the scale parameter and the shape parameter, respectively. An experimental analysis based on the assumption of different distributions of demand of product demonstrates the effectiveness of the proposed model compared to the so-called normal-based traditional model. Significantly, the proposed Weibull-based model is a comprehensible and user-friendly tool that can be useful for production system managers and practitioners.
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