Assuming that one delivery costs 20 euros, the Interest rate is 10 percent, Price of the delivered goods is 28 euros and the Deficit Penalty is 20 percent. We have 50 consumers, each coming to make shopping in 80 days on average, and buys 3 units of the product on average, then:
By our strategy, which consists of 100 Delivery Lot and Interval of Delivery 30 days, we get mean annual costs of 330 (clearly converging to this value after 2741 days).
Now, I want to improve our storage model and decided to increase the Delivery Lot to 200. Then, the results are not better - the mean costs stabilized on the higher level of 431 euros.
Next we try another strategy by changing the Delivery Lot and Interval of Delivery. We raised the Delivery Lot from 100 to 130 euros and on the other hand we reduced the Interval of Delivery to 25 days. After 2700 days the average annual costs in that case grows to 471. The result shows us again that it is not a better option.
Lastly we changed the Delivery Lot to 150 euros and the Interval of Delivery to 40 days, because we tried to raise the price of the goods, but it did not affect the results. In this case, with this data we have already managed to get a much more effective solution. As in the previous attempts we measured the same way, after the 2700th day the average annual costs are standing at 308 euros. I think it is successful, we cut the costs by 22 euros per year.