Sliding-mode inventory control in systems with fixed order quantity and uncertain demand

In this paper, we develop a new supply policy for periodic-review inventory systems applying the principles of sliding-mode control. In the considered systems, the on-hand stock used to satisfy an unknown, variable demand placed at a goods distribution center is replenished with delay from a remote supply source. The order quantity is fixed, leaving the time between the consecutive orders as a decision variable. It is shown that under the proposed nonlinear policy the stock level never exceeds the assigned storage space. Moreover, it is demonstrated that the stock is never entirely depleted, which guarantees full demand satisfaction and the maximum service level.