ANALYZING AN INVENTORY SYSTEM WITH MULTIPLE REORDER POINTS AND PERIODIC REPLENISHMENT

This paper investigates multiple reorder point, periodic replenishment systems similar to those utilized on board some U.S. naval vessels for Selected Item Management (SIM). This inventory system is of interest since it involves both regular and priority replenishment, three reorder points, and cyclical restocking of regular orders. A simulation model is developed to study the impact of demand distribution, cycle time, priority order leadtime, and the quantity of units ordered on the performance of the system. It is found that the frequency of service and days without shortages performance measures can be maximized by setting the reorder points at equal intervals between the zero level and the high level. Also, a power approximation model is presented that estimates the high level that will lead to a desired percent days without shortage percentage. © 1990.