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Vol 29 - No 02 - March 2003 The Use Of Computer Spreadsheets To Develop Optimal Inventory Policies An approach is presented for simultaneously determining reorder points and order quantities for materials stocked to meet an uncertain and independent demand. Acomputer spreadsheet model is developed which includes all relevant costs (holding, ordering, incoming transportation, acquisition, safety stock holding, and expected stockout) for individual stock keeping units. The spreadsheet solver tool is then used to find the values of reorder point and order quantity which minimises the total annual costs. This approach allows for the interdependence of reorder points and order quantities, a comprehensive range of costs as a decision criteria, discontinuous cost functions, and optimal solutions for discrete units. Page number: 14 Word count: 2330 Related Topics: Inventory management
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