Title: Property Safety Stock Policy for Correlated Commodities Based on Probability Inequality,
Abstract: Deriving the optimal safety stock quantity with which to meet customer
satisfaction is one of the most important topics in stock management. However,
it is difficult to control the stock management of correlated marketable
merchandise when using an inventory control method that was developed under the
assumption that the demands are not correlated. For this, we propose a
deterministic approach that uses a probability inequality to derive a
reasonable safety stock for the case in which we know the correlation between
various commodities. Moreover, over a given lead time, the relation between the
appropriate safety stock and the allowable stockout rate is analytically
derived, and the potential of our proposed procedure is validated by numerical
experiments.