Download presentation

Presentation is loading. Please wait.

Published byVicente Hamson Modified over 2 years ago

1
© 2003 Anita Lee-Post Inventory management Part 2 By Anita Lee-Post

2
© 2003 Anita Lee-Post Inventory management Provide the desired level of customer service Enable cost-efficient operations Minimize the inventory investment Establish a system for managing inventory Make decisions about how much and when to order

3
© 2003 Anita Lee-Post Inventory control systems Keep track of items in inventory –Inventory accuracy Keep track of items ordered and received –Inventory model

4
© 2003 Anita Lee-Post Inventory control systems continued Keep track of items in inventory –Periodic counting: physical inventory is taken periodically –Cycle counting: physical inventory is taken continuously

5
© 2003 Anita Lee-Post Inventory control systems continued Keep track of items ordered and received –Single-period inventory models Perishable products: order exactly what is needed – balance the risk of lost sales with zero inventory costs –Multi-period inventory models Fixed-time period models: an order is placed when the review period arrives – balance a large inventory with minimum inventory ordering and monitoring costs Fixed-order quantity models: order a predetermined amount each time an order is placed – balance the holding costs of inventory with its ordering costs

6
© 2003 Anita Lee-Post Fixed-order quantity models Determine order quantity to minimize inventory costs –Economic order quantity model (EOQ) –Economic production quantity model (EPQ) –Quantity discount model (QD)

7
© 2003 Anita Lee-Post EOQ assumptions Demand is known & constant - no safety stock is required Lead time (time between order placement and arrival) is known & constant – no back order is considered No quantity discounts are available Ordering (or setup) costs are constant All demand is satisfied (no shortages) The order quantity arrives in a single shipment

8
© 2003 Anita Lee-Post EOQ inventory profile

9
© 2003 Anita Lee-Post EOQ total costs Total annual costs = annual ordering costs + annual holding costs

10
© 2003 Anita Lee-Post EOQ: Total cost equation

11
© 2003 Anita Lee-Post EOQ: reorder point

12
© 2003 Anita Lee-Post EOQ example Given: Annual demand = 60,000 Ordering cost = $25 per order Holding cost = $3 per item per year Number of working days per year = 240 (a)What is the EOQ? (b)What is the total cost at EOQ? (c)What is the total number of orders placed in a year? (d)What is the time between orders? (e)What is the reorder point if lead time is 3 days? (f)What is the reorder point if lead time is 5 days?

13
© 2003 Anita Lee-Post EOQ example continued

14
© 2003 Anita Lee-Post EOQ example continued

Similar presentations

OK

Chapter 12 – Independent Demand Inventory Management Operations Management by R. Dan Reid & Nada R. Sanders 2 nd Edition © Wiley 2005 PowerPoint Presentation.

Chapter 12 – Independent Demand Inventory Management Operations Management by R. Dan Reid & Nada R. Sanders 2 nd Edition © Wiley 2005 PowerPoint Presentation.

© 2017 SlidePlayer.com Inc.

All rights reserved.

Ads by Google

Ppt on bakery business plan Ppt on 2nd world war Ppt on forward contract example Ppt on meeting etiquettes of life Ppt on field trip Ppt on itc group of hotels Ppt on two stage rc coupled amplifier Ppt on national education day in the us Free download ppt on transportation in plants Ppt on latest advancement in technology