Inventory balancing in optimal order-up-to-level systems under power long lead time

In this research intends to propose a technique to determine an optimal order-up-to-level under a target service level requirement for a single item in a periodic review inventory control systems whose demand and lead time are stochastic and empirically distributed. In addition, the case of the lead time is longer than the review period is considered in the inventory simulation optimization.At first, the empirically determine the distributions of demand and lead time be demonstrated. Second, an inventory simulation optimization for a periodic review inventory policy, in which the lead time is longer than the review period is proposed. In this paper, a procedure to acquire an optimal order-up-to-level which not only improve the desired service level but also minimize the total inventory cost. Finally, the simulation-optimization is applied for a case study data obtained from an international trading company to illustrate its applicability in the real world.The results show the efficient technical solution to determine an optimal order-up-to-level that provides better performance, particularly in the service level and the total inventory cost.