Single-Echelon Systems: Deterministic Lot Sizing

When using an (R, Q) policy we need to determine the two parameters R and Q. We shall first consider the determination of the batch quantity Q. (When using an (s, S) policy, Q essentially corresponds to S—s.) We shall in this chapter assume that the future demand is deterministic and given. If the lead-time is constant, it does then not affect the problem and we can therefore just as well assume that the lead-time L = 0. The only difference in case of a positive lead-time is that we need to order L time units earlier. See also the discussion in Sect. 4.1.3. (If the demand is stochastic, we cannot disregard the lead-time.)