ABSTRACT
In this chapter, we address the question of how large a replenishment quantity to use for a single item when conditions are rather stable (any changes in parameters occur slowly over time), and there is relatively little or no uncertainty concerning the level of demand. This simplified situation is a reasonable approximation of reality on certain occasions. More important, however, the results obtained turn out to be major components of the decision systems when parameters change with time, demand is probabilistic or multiple items are managed jointly. In addition, the goal is not to have a completely automated replenishment system, but to provide decision support to a planner. This is essential for several reasons, including (1) giving the planner the ability to incorporate factors not included in the underlying mathematical model, and (2) cultivating a sense of accountability and responsibility on the part of the decision makers.
