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.