A note from Marziye

The stochastic-service model (SSM) analyzes the stochastic time it takes from one node to replenish another (based on its inventory level). The stochastic-service model is driven by internal service levels; whereas the guaranteed-service (time) model as- sumes that each node will always serve its clients within a fixed quoted time, assuming that the demand is bounded. The guaranteed-service model(GSM) is driven by internal guaranteed-service times (in other words, how much risk-period each node should cover). In short, where the SSM uses safety stocks as buffer against the entire demand variability (resulting in random lead times), the GSM assumes that safety stocks will be used until a certain demand threshold.

Marziye Inventory Optimization, page 186 · October 5, 2023 Save to shelf
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