s,S POLICY

s,S is a minimum/maximum inventory policy. When the

inventory level on-hand falls below a minimum, s, the site will
generate a request for a replenishment order that will restore
the on-hand inventory to a target, or maximum, number, S.
When using this policy, the Reorder Point field is the minimum,
or trigger level. The Reorder/Order Up To Qty field is the
maximum, or the number to which the inventory level is
restored.
The behavior of the system depends on how often inventory is
checked. So, it is important to select the appropriate Review
Period.
s,S Targets inventory policy is just like the regular s,S policy
except that you can specify Reorder Point (s) and Order up to
Quantity (S) for certain periods. You can define the period as
days, weeks, months, years, quarters etc.
When using the s,S Targets inventory policy, the quantities and
period are specified in the Forecasts input table.
The continuous review (s, S) inventory control policy is one of
the inventory control policies, where a replenishment order
quantity is placed whenever the inventory position (on hand
stock minus back orders plus on order quantities) is less than or
equals the reorder level (s). This replenishment order quantity is
calculated to raise the inventory position to the order up to level
(S). The current mathematical solutions for such policy have
some assumption that constrains the solution from being

generalized. One of those assumptions is constant time

between demand and probabilistic demand size where solution
methods depend on type of probability distribution (Silver1998).
Other solution methods depend on the decision made when
shortages occur, whether shortages will be lost or backlogged.
All those assumptions have led to establishing a simulation
model that gives solutions are not constrained withsuch
assumptions. In this paper a simulation based model of (s,S)
inventory system is proposed. The model was constructed using
Arena (a product of Rockwell Software/Systems Modeling
Corporation).An optimization procedure was applied using
thebuilt in engine OptQuest developed by OptTek. A
simulation experiment can be defined as a test or aseries of
tests in which meaningful changes are madeto the input
variables of a simulation model so thatthe reasons for changes
in the output variable(s) can be observed and identified. When
the number of input variables is large and the simulation model
is complex, the simulation experiment may become
computationally prohibitive, besides the high computational
cost.