Cover: The Sizes of Simulation Samples Required To Compute Certain Inventory Characteristics with Stated Precision and Confidence

The Sizes of Simulation Samples Required To Compute Certain Inventory Characteristics with Stated Precision and Confidence

Published 1962

by Murray A. Geisler

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Part of a broader investigation on the design and operation of simulation models for studying management policies and other problems that involve complex systems of random variables. This Memorandum presents calculations of sample sizes required to estimate certain variables (overages and shortages) of interest in setting inventory policies. For many of stock-control levels and reorder-point values used in the computations, the sample sizes required are less than 100. In terms of machine computing time, a sample of this size is very small, so that the number of time periods that must be sampled to estimate overages and shortages with reasonable precision and confidence is quite reasonable over the likely range of values of stock-control level and reorder-point encountered in inventory simulations.

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