In practice, lead time demand (LTD) can be non-standard: skewed, multi-modal or highly variable; factors that compromise the validity of the classic approaches for setting safety stock levels. Motivated by encountering this problem at our industry partner, we develop an approach for setting...

The value-of-reliability (VOR) reflects the savings in inventory-system costs from more reliable (less variable) lead times. Previous studies have revealed that more reliable, but positively skewed, lead times could actually increase optimal safety inventory when the probability of satisfying...

Skewed and multimodal lead-time demand (LTD) distributions can be present in supply chains. Under these conditions, logistics managers find that conventional approaches, which assume standard LTD distribution shapes, yield unreliable estimates of a single item’s reorder point (ROP) in relation...