­
­
­
­

Inventi Impact - Emerging Economies

Articles

  • Inventi:mee/93/14
    VALIDATING VIRTUAL SAFETY STOCK EFFECTIVENESS THROUGH SIMULATION
    Maria Elena Nenni, Massimiliano M Schiraldi

    As a means of avoiding stockouts, safety stocks play an important role in achieving customer satisfaction and retention. However, traditional safety stock theory is based on the assumption of the immediate delivery of the ordered products, which is not a common condition in businesstobusiness contexts. Virtual safety stock theory was conceived to raise the service level by exploiting the potential time interval in the ordertodelivery process. Nevertheless, its mathematical complexity prevented this technique from being widely adopted in the industrial world. In this paper, we present a simple method to test virtual safety stock effectiveness through simulation in an inventory system using a base stock policy with periodicreviewsandbackorders.Thisapproachcanbe usefulforresearchersaswellaspractitionerswhowant to model the behaviour of an inventory system under uncertain conditions and verify the opportunity for settingupavirtualsafetystockontopof,orinsteadof, thetraditionalphysicalsafetystock.

    How to Cite this Article
    CC Compliant Citation: Maria Elena Nenni, Massimiliano M Schiraldi, Validating Virtual Safety Stock, Effectiveness through Simulation, Int. J. Eng. Bus. Manag., 2013, Vol. 5, 41:2013, doi: 10.5772/56859.
    Download Full Text