Numerical comparisons of inventory policies for periodic review systems

Discrete time shortage cost systems of inventory are analyzed from the standpoints of two parameters, the reorder level and the order up to level. The analysis seeks to identify nearly optimal inventory management policies with a minimum of computational effort. Three methods for determining near optimality are discussed, one of which involves heuristic programming. The methods are applied to various inventory problems and their results are compared numerically. These comparisons and error levels associated with each method are detailed.