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19 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What does this Variable stand for?
Q |
Order quantity
(# of pieces per order) |
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What does this Variable stand for?
D |
Demand for the time period considered
(units/time period) |
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What does this Variable stand for?
S |
Setup/order cost
($/Order) |
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What does this Variable stand for?
H |
Holding Cost
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What does this Variable stand for?
I |
Interest Rate
(%/time period) |
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What does this Variable stand for?
P |
Unit Cost
($/unit) |
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What does this Variable stand for?
IC |
inventory cost
S+H setup+holding costs |
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What does this Variable stand for?
TC |
setup cost * # of orders
+ holding cost * average Q + P*D |
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What does this Variable stand for?
EOQ |
sqrt(2DS/H)
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what is independant demand
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from customer side, Smooth
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(end items and finished goods)
car |
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what is dependant demand
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derived demand, lumpy
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(subassemblies and components)
car parts |
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What is the objective of inventory systems
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to minimize total inventory cost and maintain satisfied service level
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what types of inventories are there?
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Raw materials
in-process goods(WIP) finished goods supplies |
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what are the inventory related costs?
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holding cost
shortage cost order cost |
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Average Inventory Level=
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Q/2
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the amount you get per order is the most you can have.
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Annual Holding Cost=
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H*Q/2
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holding cost/unit/time times the average inventory level
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Number of Orders per year=
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D/Q
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total demand for the year, divided by the # of units per order
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Annual order Cost=
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S*D/Q
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orders per year times order/setup cost
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Total Cost (TC)=
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P*D + S*D/Q + H*Q/2
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total unit cost plus annual order cost plus annual holding cost
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