Multi-product (item) stock control in the context of uncertainty and nonstationarity. Part II. Safety stock control

The paper discusses the problem of multi-item inventory control problem in the context of uncertainty and nonstationarity. The author proposes a multi-stage procedure as the basis for practical solution of the multi-item inventory control problem in the context of nonstationarity and lacking trustable information on statistical parameters of the demand. The main point of this procedure is that it starts with identification of the main trends covering seasonal components of the demand which are then used as a basis for the solution of the deterministic multi-item inventory control problem. At subsequent stages solutions are studied for the problem of generating additional orders for inventory replenishment (safety stock) to make up for random deviations of the demand from the identified trends.