Abstract for: Effect of Lead Time on Anchor-and-Adjust Ordering Policy in Continuous Time Stock Control Systems
Anchor-and-adjust is an ordering policy often used in stock control systems. Weight of Supply Line, the relative importance given to the supply line compared to the importance given to the stock, and Stock Adjustment Time, the intended time to close the discrepancy between the desired and current levels of the stock, are the two critical decision parameters of the anchor-and-adjust ordering policy. In this study, we conduct an extensive simulation study using a generic stock management structure and offer suggestions for the selection of these two decision parameters. The decision parameter values are significantly affected from the order and duration of the lead time.