AbstractThis paper discusses the joint use of analytic and simulation techniques to study the statistical characteristics of selected inventory models. The concept followed was to use analytic methods insofar as possible and then use simulation after that.We begin with a simple inventory model having zero procurement lead times and exponential demand, and derive means and variances of reorder, holding, and shortage costs. When we introduce non-zero procurement lead times, we find it necessary to use simulation. The statistical problem then involves computing the size of simulation samples required to estimate the holding and shortage costs with specified precision and confidence.The statistical results obtained both analytically and by simulation are summarized, along with the validation test made of the simulation data. The test results were quite satisfactory.