120 ery Mange distinct inventory policies. ald depend eat shaves, equi specie degree of managenen wot re by using some appropriate stock pope ae 7 policy variables (system parameters), 7 athe wtons ta olow, we present noe. ih the ecepion of the anton and ie mates oe ngs evelopment omer slot exes thea of dae ae” PM 42. Economic Order Quantity Decision Rules 2.4 Costs In an Inventory System As sated previouly, the objective of te pr 4 inventory ssc the minima ef eatin thoes Teer sp ne tl ri ‘costs relevant to a pure inventory 5) ; any Sy: he nl cs at hon econ! he ome which ve poly is changed, We can group thee eae me 1s a ih ecu [Sed cri py es emt ‘sociated with stockouts (demand excceds supply) z Prewoment ots an bs ss compos of wo tobe pid y the ym o he spa oie sae lncur ythe oven nthe procrema prone a The ordtng cost can fave a tube of oa (rapcowrk comput pricosingloptane cae sate n ofthe items ordered, and handhng and inspection of te shpenen hen the cost hat has ms, and th cot led ordering cot i administrative est yer ae thn fei cannons the dion on adr ag fea coast in th aaa they Peal be mented thatthe asumption of fixed ordering cst ihe race vt) a ah we ona cher We ule svt hoves at iia tocar cma nr, ie, Es wwariant only within a limited range of lot ovr uh ye aint ny ins ith a radical change in order size, one might reconsider the mode of Ma ahh sl npn ep igi. On anther hand, part of the anaual administrative costs does not vary if the «er dc ys wien mis, yon hse nit fo 0 to ef purchasing ngs, phone linc, cost of supporting services, and 0 same which ads 0 2 cost chart as shown in igus 4.1 (Hadley and ‘nt 9) Fn cated wih he exer of irene ate du oa ube of awa rage and handling propery tne insurance, sae sarge ei he invent tam des ot own the singe ese Th capil cst opr ce et expenditures for fads capi o ke rt of return tht code otained by sven elsewhere {fecal Ged up in avery. “Bf the shove cemporets, oly thse which change a te Jel of invenery changes shouldbe brooght ithe ana. For instance, the set sent om heating ging and secu servis forte ware ibe lovable wih te oc inl and ifs they shoal be disrezatde. “Te verity ile imentoy carping cst cemponenss undo eee inh anetonal elaonhipe to the inventory level, ich ete ‘Sw iia mol th cos in try ate. The wl ‘Sinubing sumption mae io nvestory manapement tat crsig ots fe oor ie a hives vei, Ta 1 eng charge (or heding cos expe in dors pe arp do SREuuE tvesannt and i the Unit cw ofthe Hom i dlr, then the OUR A are = Tome soanaere "