Inventory Models Comparison in Variable Demand Environments

This paper presents a comparative cost performance study of four inventory models. One of them, referred as Requirement Planning, operates using demand forecast to quantify the acquisition decisions. The other three inventory models are the Order Up to Maximum Inventory Level, Base Stock and Fixed Lot Size. The Requirement Planning and Base Stock models operate with minimal purchase order quantity referred as Minimum Net Requirements. Firstly, the forecast for the active model is obtained by adjusting the Single Exponential Smoothing or the Holt’s linear method to the historical data. After that, operations of the four inventory models are simulated, using search methods to minimize the cost performance of each one. The models are ranked using the mean total cost criterion. An analysis is carried out to verify the fixed purchase cost effect on the performances. Conclusions show the best overall model can change with the Purchase cost. Kanban Base Stock model presents poor results.