Operations Management Formula Sheet Essay Example

1. EVPI = Expected value with perfect information – Maximum EMV = EVwPI – Maximum EMV

2. Moving Average

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3. Weighted Moving Average

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4. Exponential Smoothing

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5. Linear Regression

[pic]

6. MAD and Tracking Signal(TS)

[pic]

7. EOQ [pic] Q*=Optimal number of units per order (EOQ) Q = Number of units per order D = Annual Demand, Units H = Holding (or Carrying) Cost, $ / unit /year S = Ordering (or Setup) Cost, $ / order or setup P = Price per unit

Total Cost = [pic]

8. EOQ (Production order quantity model):

[pic] Total Cost = [pic] Imax = [pic] p = Daily production rate d = Daily demand rate, or usage rate

9. REORDER POINT: (Fixed Order Quantity Model)

I. Demand varies, Lead time constant

ROP = (Average daily demand * Lead time in days) + Z[pic]

II. Lead time varies, Demand constant

ROP = (Daily demand * Average lead time in days) + Z(Daily demand) * [pic]

III. Both Demand and Lead time vary

ROP = (Average daily demand * Average lead time) + Z[pic]

Where [pic]= Standard deviation of demand per day [pic] [pic]= Standard Deviation of lead time in days Z = Number of standard deviations

10. ORDER QUANTITY: (Fixed Time Period Model)

[pic]

11. Single period inventory model

Service level = [pic] where [pic]= Cost of Shortage = Sale price/unit – Cost/unit [pic]= Cost of Overage = Cost/unit – Salvage value/unit

12. Process Control Using Attribute Measurements

[pic]

where [pic]=mean fraction defective in the samples z = number of standard deviations [pic]= standard deviation of the sampling distribution

13. Process Control by Variables

[pic]
Where
[pic]=mean of the sample means [pic]=average range of the samples [pic] = values from the chart below

Factors for