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### 19 Cards in this Set

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