Policy parameters

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Policy parameters

The two policy parameters are determined based on the inventory policy as follows:

Policy	Parameter 1	Parameter 2
(R,Q)	Reorder Point (R) R = Lead Time Demand Mean + Safety Stock	Reorder Qty (Q) Q = Min Replenishment Qty Min Replenshment Qty = Max( Minimum Order Quantity, Replenishment Frequency or DBP * Daily Demand Mean)
(s,S)	Reorder Point (s) s = Lead Time Demand Mean + Safety Stock	Order Up To Level (S) S = s + Min Replenishment Qty Min Replenshment Qty = Max( Minimum Order Quantity, Replenishment Frequency or DBP * Daily Demand Mean))
Basestock	Order Up To Level
(T,S)	Review Period (T)	Order Up To Level (S)

Last modified: Wednesday May 15, 2024

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