This study is concerned with an effectiveness analysis of (S-1, S) inventory policy.
It is known to be appropriate to use (S-1, S) inventory policy for items of low-demand and high-cost. Under the (S-1, S) inventory policy the total inventory cost may, however, increase as the ordering cost does, which implies that some forms of bulk ordering might be more economical.
Two specific bulk ordering inventory policies, i.e., (S-2, S) and (S-3, S) inventory policies, are considered in this study, with which the (S-1, S) inventory policy is compared for its relative effectiveness in terms of the overall inventory system cost.
The main result of this study is that the (S-1 ,S) inventory policy is not necessarily better than the others in the high order-cost inventory system even if the item is low in demand and high in cost.
