Selection of reorder point when demand is variable and also lead time is variable with different significance level to demand deviation & lead deviation

Abstract

In material management Inventory control has significant importance, Inventory level decides reorder point, Due to deviations in demand & lead time tendency is to keep safety to stock. In this paper various steps involved in calculating reorder points, have been given rethought by coming out with new formula based on different significance to demand deviation & lead deviation This helps to improve reorder point and in turn lead time. Ultimately it helps to reduce safety stock due to different significance level for deviation in lead time and deviation in demand.