The mandate for goods of any customer is a Poisson process with passion. Time calculate of goods delivery from the wholesaler to the customer has a normal distribution with limitations. The policy in order forming for the customer can be presented as: A new order is positioned at the specific time, when the stock levels fall to a certain level the order quantity is constant. We suppose that the quantity is greater than the level arrived at. It is important to note that order reorder point of the level and quantity are control parameters of the first stage model.
During this stage, it is supposed that the manufacturer supplies his production to wholesaler according to a fixed package. Therefore, the ordering process is considered to be within a constant period. The moments of placing adjacent wholesaler’s orders and order quantity is recognized as a difference between fixed stock level and the quantity of goods in the period of ordering. Therefore, the period and stock level will be control restrictions in the proposed model time in the second stage.
The assumption is that every time a new order has to be placed in any condition in the event that the stock level is large then a new ordering should not occur. Commonly, the model would maintain the state of lead-time and quantity of goods at that time as soon as the order is established (Jain and Malehorn, 2005. pg. 241). This in turn is linked to the actual scenario where the wholesaler will use his own means of transport. In most cases, this part ways at the suitable time with fixed moments of time. However, this does not depend on the existence of the order and with the arbitrary lead-time. For example, there will be ferrying of goods using the previews that depart the 2nd and 16th day of every month.
The Warnsley Ltd Company places an order after every two weeks. The quantity ordered at the beginning of the week usually