Expected Average Inventory Level for an S, S-1 Inventory Policy | Concept

Ole Ersoy
Sep - 20  -  1 min

The Expected Average Inventory Level for an S, S-1 policy is the inventory level that we expect given an lead time demand level and an initial stocking level.

Examples

The initial stocking level is 1 and our lead time demand is 1. The Expected Average Inventory Level is 0.5.

The initial stocking level is 10 and our lead time demand is 19. The Expected Average Inventory Level is 0.5.

The initial stocking level is 10 and our lead time demand is 5. The Expected Average Inventory Level is 5.5.