Of all the inventory policies we have been over in this class, I think that the most recent ones are the most valuable/useful. Base stock,newsvendor, and (Q,R) are important I think because they deal with uncertain demand factors which is almost always going to be the case in the real world. I think systems such as EOQ and EPQ are good for understanding the basics of inventory policies and what factors contribute to an optimal system but because of the assumptions required are not incredibly useful later on in the real world. Also, I think that systems involving backorders are more useful than ones without just because more companies probably have a system in which backorders are a real thing. Most companies allow you to order products if you they don't have them immediately in stock. So I think the ability to know what impact backordering costs has on your inventory policy is very important. All of the models we have seen add something unique to your knowledge about inventory policies and are important in their own right. I just wanted to point out a few things that I thought are important for future endeavors.
-Mark Brislin
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I agree with your assessment Mark. However, I do think that there are some "real world" cases where demand is constant and known. For example, the power company probably has a pretty good idea of the amout of power that will be demanded next month. Therefore, they should be able to use the EOQ models with a fairly high degree of certainty and accuracy.
On another note, I agree that backordering costs should almost always be considered.
-Andrew Freeman
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