An Inventory Model with Order Crossover

In inventory systems with stochastic lead times, it is possible that more than a single order will be outstanding. In that case, orders may cross; that is, they may not be received in the same sequence in which they are placed. In this paper we develop a multicycle analysis for the case when lead times are independently and identically distributed. When contrasted with the conventional single cycle analysis, the multicycle approach provides a more accurate assessment of the overall inventory cost and leads to a superior inventory policy.