𝔖 Bobbio Scriptorium
✦   LIBER   ✦

Estimating the lead-time demand distribution for an autocorrelated demand by the pearson system and a normal approximation

✍ Scribed by Bong-Geun An; Stergios B. Fotopoulos; Min-Chiang Wang

Publisher
John Wiley and Sons
Year
1989
Tongue
English
Weight
764 KB
Volume
36
Category
Article
ISSN
0894-069X

No coin nor oath required. For personal study only.

✦ Synopsis

The exact first four moments of lead-time demand L are derived for an AR(1) and a MA(1) demand structures where the arbitrary lead-time distribution is assumed to be independent of the demand structure. These moments then form a basis for the Pearson curve-fitting procedure for estimating the distribution of L. A normal approximation to L, a version of the central limit theorem, is obtained under some general conditions.

Reorder points (ROPs) of an inventory system are then estimated based on the Pearson system and a normal approximation. Their performances are evaluated. Numerical investigation shows that the Pearson system performs extremely well. The normal approximation, however, is good only for some limited cases, and is sensitive to the choice of the lead-time distribution. A possible improvement is noted.

πŸ“œ SIMILAR VOLUMES

The truncated normal–gamma mixture as a
The truncated normal–gamma mixture as a distribution for lead time demand
✍ J. K. Ord; U. Bagchi πŸ“‚ Article πŸ“… 1983 πŸ› John Wiley and Sons 🌐 English βš– 293 KB

## Abstract A central problem in inventory control concerns the statistical description of total demand during the lead time between placement and receipt of an order. Since both the demand per unit time and the lead time are random variables, the distribution of lead time demand is formulated as a