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On approximating lead time demand distributions using the generalized \(\lambda\)-type distribution. (English) Zbl 0852.90063

Summary: The use of the generalized \(\lambda\)-type distribution (GLD) is proposed for the analysis of standard inventory problems. Using this distribution to approximate the lead time demand distribution we analyze the generalized newsboy problem and a \((Q, r)\) policy. The standard inventory measures like optimal order size, reorder level, average demand lost, etc. are obtained under the GLD and are compared with those given by Shore’s approximation and also under exact distributional assumptions. Through a numerical study the various inventory measures are compared using the GLD and Shore’s approximation with the exact distributions. The comparison reveals that the GLD approximation is better suited than Shore’s approximation to model the lead time demand.

MSC:

90B05 Inventory, storage, reservoirs
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