point) We know‚ A = d * LT‚ so the fixed order interval order quantity equation Q becomes Q = (d * LT) + (d * OI) – (d * LT) * Q = d * OI = (6) (89) = 534 units Therefore‚ ordering at six-week intervals requires an order quantity of 534 units. Now‚ the optimal order quantity is determined by using EOQ equation. Q = sqrt(2dS/H) = sqrt[(2*89*32)/.08] = 266.833 (or) 267 The weekly total cost based on optimal order quantity EOQ is given below: TC of EOQ =
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$40 per order Annual carrying cost*** 30% Safety stock 2 sets Wright per set 1000 lb Lead time (average) 4 weeks *Excludes freight cost **This cost includes receiving ($20 per order) and paperwork ($20 per order) ***This cost includes the cost of capital (15%)‚ insurance (3%)‚ warehouse space (5%)‚ and obsolescence (7%) Note Shipping cost $10 per cwt* or $9 per cwt if order is at least 10 bedroom Regular order 6 bedroom Discount 2% if order is at least
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using the sample data given in Table 2.20 of the case in the text make a recommendation of how many units of each style Obermeyer should order during the initial phase of production. Assume that all 10 styles in the sample problem are made in Hong Kong. c_u 24% c-o 8% Style Mean S.d optimal order level hongkong hongkong adjusted with minimum order of 600 Seduced 4017 1113 4768 1809 1809 Assault 2525 680 2984 1132 1132 Electra 2150 807 2694 1022 1022 Anita 3296
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replenishment order from Proctor & Gamble. What costs should it take into account when making this decision? The main cost categories for the supermarket’s inventory policy are material costs‚ ordering costs‚ and holding costs. Material cost is the money paid to Proctor and Gamble for the goods themselves. Ordering costs‚ also called procurement costs‚ are incurred by requesting the goods from the supplier and are fixed in the sense that they do not vary with the size of the order. Examples
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Formed in 1981 by cousins Ray Martin and Jim Pullin‚ the firm’s primary retail outlets are located within a 400-mile radius of the distribution center. These retail outlets receive the order from Martin-Pullin within two days after notifying the distribution center‚ provided that the stock is available. However‚ if an order is not fulfilled by the company‚ no backorder is placed; the retailers arrange to get their shipment from other distributors‚ and MPBC loses that amount of business. The company distributes
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policies. Compare the present annual average cost with the cost of using a system such as EOQ‚ and discuss any other order policies as appropriate. A233 circuit board: Average weekly usage = 32 units A (Annual demand) = 32 units *52 week = 1664 units Lead time = 1 week c (unit cost) = $18 i = 23% 23% inventory holding cost: $18 *23% = $4.14 S (order cost) = $16 per order Q (order quantity) = 64 units Annual purchasing cost = A * c = 1664 * $18 = $29‚952 Annual ordering cost = A/Q *S = 1664/64
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shortages. Let the parameters from the basic EOQ model. d = constant demand rate K = setup cost for placing one order Q = order quantity h = inventory holding cost per unit of product per unit of time p = shortage cost per unit of product per unit of time S = inventory level just after an order of size Q arrives So‚ Q– S = Shortage in inventory just before an order of Q units is added Production or ordering cost per cycle = K+cQ ‚ where cQ is the unit cost During each
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Kavin Chinnasamy BADM 375 Cheat Sheet Queues form due to variability in arrival times‚ service times & service availability. Impact of variability increases as utilization increases! (throughput goes up or capacity goes down). Little’s Law: I = R x T (congestion = arrival rate x delay). Little’s Law is I = R*T (where I = avg inventory‚ r = throughput rate‚ t = avg flowtime). Delay explodes as the arrival rate approaches the system capacity: Delay ≈ 1/(capacity–arrival rate). The utilization
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30 interviews and be paid $200. Due to limited transportation facilities‚ no more than 20 interviewers can be hired. The scientist’s objective is to determine how many undergraduate students‚ graduate students and faculty members should be hired in order to maximize the number of interviews. a. Formulate the given problem as a linear programming problem. [4 marks] The problem is solved using a software and the following output is obtained. Objective Function Value
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still perform such upgrade in the long run. Q1b. Should the company build in-store networks? Yes‚ it will remove some redundancies in daily operations. For instance‚ employees no longer have to collect data physically from each POS terminal in order to obtain daily sales totals. In-store network will also enable store managers to have a more comprehensive understanding of sales activities on both a consolidated level and section (Men‚ Women‚ or Children) level. Q1c. Should the company give
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