Professional Documents
Culture Documents
Introduction
1. Types of Inventories
c Rakesh Nagi
University at Bualo - IE
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3. Relevant Costs
c Rakesh Nagi
University at Bualo - IE
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Assumptions
c Rakesh Nagi
University at Bualo - IE
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K + cQ hQ K + cQ hQ
+
=
+
T
2
Q=
2
K
hQ
+ c +
=
Q
2
G(Q) =
Check G00(Q)
(19)
(20)
2K
00
G (Q) = 3 > 0 for Q > 0
c Rakesh Nagi
(18)
University at Bualo - IE
(21)
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University at Bualo - IE
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c Rakesh Nagi
University at Bualo - IE
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Cycle length = T
T = T1 + T2; T1 is the uptime, T2 is the downtime
Maximal inventory level = H (H =6 Q)
Per cycle: # ordered (Q) = # produced (P T1) = # consumed (T )
T1 = Q=P
H=T1 = P
H = Q(1 =P )
c Rakesh Nagi
University at Bualo - IE
(22)
(23)
(24)
68
K hH
+
T
2
K hQ
=
+
(1 =P )
Q
2
h0 = h(1 =P )
v
u
u
Q = t 2K
h
G(Q) =
(25)
(26)
(27)
c Rakesh Nagi
University at Bualo - IE
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c Rakesh Nagi
University at Bualo - IE
(28)
(29)
70
1
2
(
Q
M
)
@
A
2
=T
v
u
u
u
t
(h+p)
h+p
Q = Khp
= QEOQ
p
v
v
u
u
u
2
Kp
u p
u
t
= QEOQt
M =
h(h+p)
c Rakesh Nagi
University at Bualo - IE
h+p
71
All-Units
Incremental
Example: all-unit
:30Q for
C (Q) = :29Q for
:28Q for
c Rakesh Nagi
0 Q < 500
500 Q < 1000
1000 Q
University at Bualo - IE
(30)
(31)
(32)
72
ALGORITHM: all-unit
1. Compute the largest realizable EOQ value.
1.1. compute EOQ for lowest price.
1.2. if feasible: stop
1.3. otherwise: continue with next higher price
2. Compare annual cost at largest EOQ and break-point prices
2.1. for each break-point price, compute annual cost
2.2. select lowest of above and EOQ
3. Optimal Q is the one for which annual cost is minimal.
c Rakesh Nagi
University at Bualo - IE
73
ALGORITHM: incremental
Example
so that
(33)
(34)
(35)
(36)
(37)
(38)
University at Bualo - IE
(39)
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ALGORITHM: incremental
1. Determine the expression for C (Q)=Q
2. Dene equation of G(Q) using C (Q)=Q
3. Compute Q for each price interval
c Rakesh Nagi
University at Bualo - IE
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Multiple products
Resource constraints: total $ value, space
Downscaling method:
or space consumed) = constant
Assumption: (per unit cost
holding cost
c Rakesh Nagi
University at Bualo - IE
76
University at Bualo - IE
77