For the inventory example of Sec. 1.5, suppose that the delivery lag is distributed uniformly between 1 and 3 months, so there could be between 0 and 3 outstanding orders at a time. Thus, the company bases its ordering decision at the beginning of each month on the sum of the (net) inventory level [denoted by I(t) in Sec. 1.5] and the inventory on order; this sum could be positive, zero, or negative. For each of the nine inventory policies, run the model for 120 months and estimate the expected average total cost per month and the expected proportion of time there is a backlog. Note that holding and shortage costs are still based on the net inventory level. Use stream 1 for interdemand times, stream 2 for demand sizes, and stream 3 for delivery lags.
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