Presentation on theme: "UCL ESPO/IAG/POMS PROD 2800 PRODUCTION AND OPERATIONS MANAGEMENT Gestion de la production et des opérations Per AGRELL Lecture 5Inventory."— Presentation transcript:
UCL ESPO/IAG/POMS PROD 2800 PRODUCTION AND OPERATIONS MANAGEMENT Gestion de la production et des opérations Per AGRELL Lecture 5Inventory Control
PROD Outline Key issues Order policies – Fixed order quantityEOQ – Q-model – Variable-time period model(r,Q) – Fixed-time period model – P-model (s,S)
Key issues 1. Which policy? 2. When to order? 3. How much to order?
Inventory Costs Holding (or carrying) costs. – Costs for storage, handling, insurance, etc. Setup (or production change) costs. – Costs for arranging specific equipment setups, etc. Ordering costs. – Costs of someone placing an order, etc. Shortage costs. – Costs of canceling an order, etc.
PROD Reorder Point System (r,Q) r Q L
PROD Fixed-Time Period Model (S,T) Review every T periods Inventory position (IP) = On-hand + on-order - backlog Order up to level S if IP < s