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Materlals Managemont and Inventory Control

IMPLEMENTATION OF PURCHASE INVENTORY MODEL

9.7
of inventory
model be classified into Fixed Order Quantity
he nractical version of purchase
can
the
Period Quantity System (P System). Thesce are presented in
wstem (Q System) and kixed
following sections.

exist in each of the systems.

The following cases

Varying demand and constant lead time.

Constant demand and varying lead time.

Varying demand and varying lead time.

9.7.1
Fixed Order Quantity System (Q System)
an order is placed
of nventory, whenever the stock level touches the reorder level,
In this system in
of this model is shown
for a fixed quantity which is equal to EOQ. A schematic representation
the following Fig. 9.9.

Reorder level

Demard during leadtime

Reserve stock

Safety stock

Time
Fig. 9.9 Qsystem of inventory.

The average demand during the lead time (average lead time) is known as the demand during
lead time (DLT). The variation in demand during lead time (average lead time) is known as safety
stock. The average demand during delivery delays is called reserve stock. The Reorder level is
computed as the sum of the demand during lead time (DLT), the variation in demand during lead time
(Safety stock) and the average demand during delivery delays (reserve stock).