Fiscal-period-based service level constraints and safety stock requirements†

†A similar version of this paper was published at the Third International Symposium on Inventories, Budapest, Hungary, August 1984.

SUMMARY

This paper deals with service level constraints which are defined over a fiscal period. Fiscal-period-based service level constraints are considerably more complex than their lead-time counterparts and result in significantly different safety stock requirements. Thus, a confusion between a lead-time and fiscal-period perspective can result in substantial financial consequences and is therefore of managerial relevance. Although no generalizations are possible from the limited results presented, further computational experience suggests that the findings reported hold over a wide range of situations.

Notes

†A similar version of this paper was published at the Third International Symposium on Inventories, Budapest, Hungary, August 1984.