SENSITIVITY ANALYSIS AND COMPARATIVE EVALUATION OF AN IMPROVED INVENTORY MANAGEMENT MODEL UNDER VARIABLE REPLENISHMENT AND SHORTAGE CONDITIONS
Keywords:
Inventory Management, Sensitivity Analysis, Variable Lead Time, Shortages, Reorder Point, Order Quantity, Comparative Evaluation, Stochastic Inventory, Service Level, Mathematical ModellingAbstract
Inventory policies that perform well under average replenishment conditions may become inefficient when replenishment lead time varies and shortages occur. This study presents a mathematical sensitivity and comparative evaluation framework for an improved continuous-review inventory model in which order quantity, reorder point, variable replenishment time, and shortage penalties are considered jointly. The framework compares a conventional EOQ-based policy with an improved policy selected through systematic search over feasible order quantity and reorder point combinations. The analysis evaluates total relevant cost, shortage exposure, service level, fill rate, average inventory, and replenishment workload under low, moderate, and high lead-time variability. Additional sensitivity analysis examines the response of the optimized policy to shortage-penalty changes. The numerical experiment uses a synthetic 12-period demand sequence and explicitly serves as a reproducible illustration rather than organizational field evidence. The results demonstrate the methodological value of evaluating an inventory policy over multiple replenishment scenarios rather than relying on a single nominal lead-time assumption. The proposed framework provides a basis for identifying parameter conditions under which an inventory policy remains economically and operationally robust.
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