The impact of data collection on fill rate performance in the (R,s,Q) inventory model

In this paper we consider the determination of the reorder point s in an (R , s, Q) inventory model subject to a fill rate service level constraint. We assume that the underlying demand process is a compound renewal process. W e then derive an approximation method to compute the reorder level such tha t a target service level is achieved. Restrictions on the input parameters are given, within which this method is applicable. Moreover, we will invest igate the effects on the fill rate performance in case the underlying deman d process is indeed a compound renewal process, while the demand process is modelled as a discrete-time demand process. That is, the time axis is divi ded in time units (for example, days) and demands per time unit are indepen dent and identically distributed random variables. It will be shown that sm ooth and erratic behaviour of the inter-arrival times have different impact s on the performance of the fill rate when demand is modelled as a discrete -time process and in case the underlying demand process is a compound renew al process.