Zero Order and Scope

Zero-Order Cap

If inventory position is already above S, the order quantity is capped at zero.

highlighted = computed this step

High position

The high-position example has position 25.

position=25\text{position}=25
Zero-order capThe chart shows that order quantity is capped at zero when position is already above S.zero-order capS = 18 + 5 = 23protection periodreview 4 dayslead 2 daysprotection demand 3 x 6 = 18inventory position and order quantitysnapshoton handon orderbackorderspositionqdecisionsnapshot7401112order 12position high2500250order 0q = max(S - position, 0)deterministic demand and lead time only

Above S

That position is above the order-up-to level.

position>S=23\text{position}>S=23
Zero-order capThe chart shows that order quantity is capped at zero when position is already above S.zero-order capS = 18 + 5 = 23protection periodreview 4 dayslead 2 daysprotection demand 3 x 6 = 18inventory position and order quantitysnapshoton handon orderbackorderspositionqdecisionsnapshot7401112order 12position high2500250order 0q = max(S - position, 0)deterministic demand and lead time only

Zero cap

Do not order a negative amount; order quantity is 0.

q=0q=0
Zero-order capThe chart shows that order quantity is capped at zero when position is already above S.zero-order capS = 18 + 5 = 23protection periodreview 4 dayslead 2 daysprotection demand 3 x 6 = 18inventory position and order quantitysnapshoton handon orderbackorderspositionqdecisionsnapshot7401112order 12position high2500250order 0q = max(S - position, 0)deterministic demand and lead time only