BREAKEVEN ANALYSIS

Total cost= fixed cost +(no of units*variable cost)

Total revenue = selling price *no of units

If u have to compare two process or machines

IE: PROCESS A = PROCESS B (units to be found)

FC of A+ (VC of A*X(no of units) = FC of B+ (VC of B*X(no of units)

GIVEN:

PROCES PROCES
SA SB
FC 2000 10000 Process A = Process B
VC 50 30
P 100 100 2000+50v=10000-30v

20v=8000

v=400units

PRODUCTIVITY

SINGLE FACTOR PRODUCTIVITY:

To find: product per labour hr

FORMULA: NO OF UNITS PRODUCED/ (TOTAL NO OF WORKING/LABOUR HOURS)

MULTI-FACTOR PRODUCTIVITY:

To find: product per rupee/dollar

FORMULA: no of units produced/ total cost

FORECASTING:

estimation tool for prediction of events related to complex and uncertain events using the past data.

EXTRAPOLATIVE MODEL

MOVING AVERAGE METHOD

1)Simple moving average method

Take the average of 3 or more variables

FORMULA =AVERAGE(

2)weighted moving average method

Step 1:Calculate the weights (where the total weights are equal to 1)

Step 2:Multiply the weights with the respective values

Step 3:Add all the multiplied weights

weighed
weights sales
sales

0.4 95 38 Step 2: weights*sales

0.3 105 31.5
0.2 90 18
0.1 100 10
total 1 97.5
Step:1 step 3:sum of all weights

EXPONENTIAL SMOOTHENING METHOD

Smoothening constant (alpha) = will be given in the Q or take 0.2 if alpha is close to 0.9 if alpha is close to 1

FORMULA:

Forecast: Ft+1 = Ft+ alpha(Dt – Ft)

 Ft+1 – forecast for current period

 Ft – forecast for previous period
 Alpha - constant
 Dt – actual demand or parameter for previous meter

Error: demand – forecast

TIME SERIES METHOD

Step 1:

X Y (actual
(years) demand) X*Y X*X
ε

Step 2: total all the 4 columns

Step 3: find

 X bar: sum of x/no of x

 Y bar: sum of y/no of y

Step 4:linear equation

Y = a + bX

b = εxy-n*xbar*ybar/εx^2-n*xbar^2

step 5: from the values of x given calculate the y

step 6: get regression statistics using data analysis

step 7: mention COEFFICIENTS from the analysis

 a = y intercept x (intercept)
 b = slope of the line(X)
CORRELATION CO-EFFICIENT

STEP 1:

Age
Weight
(years) X*Y X^2 Y^2
(Kg)Y
X

STEP 2: Calculate the value of (r):

/
FORMULA: = εxy-(εxεy)/n sqrt((εx^2 – (εx)^2/n) * (εy^2 – (εy)^2/n))

Inference for r

 r=0 - no correlation
 r=+1 -perfect positive correlation
 r=-1 -perfect negative correlation
 r=0.5 -moderate correlation which exists btw variable x and y
 r=0.75-0.99 -high degree of positive correlation
 r=-0.5 -negative moderate correlation
 r=-0.75-0.99 -high degree of negative correlation

SEASONALITY

Measures of forecast accuracy

Step1:Calculate:

Average demand : average of the years

Formula: =average()

Average monthly demand: sum of average demand/ total no of months

Seasonal index: avg demand/ang monthly demand

avg avg monthly seasonal

2015 2016 2017
demand demand index

Step2: calculate the forecast:

Formula: (average demand/no of months) * seasonal index

FACILITY LOCATION

Center of gravity

Step 1: write the x and y coordinates and the annual supply

Annual
X Y Supply

Step 2: calculate Xc and Xy

Xc = εxw/εw
 Where : εxw formula: =sumproduct(x values,annual supply)

εw formula: =sum(annual supply)

Yc = εyw/εw

Where : εyw formula: =sumproduct(y values,annual supply)

εw formula: =sum(annual supply)

Load distance

TRANSPORTATION MODEL

Step 1: copy the same table

 ADD LHS IN BOTH ROWS AND COLUMNS

o CALCULATE THE SUM OF EACH ROW AND COLUMN
 ADD A ROW AND COLUMN FOR RERLATIONS

Step 2: CALCULATE THE TOTAL COST

Formula: sum product(values of table 1,values of table 2)

Step 3: USE SOLVER

 Set objective: select the total cost value cell

 To: select min
 By changing variables: select ONLY the values of 2 ND TABLE
 Subject to constraints: CELL REFERENCE: ADD cells of LHS OF COLUMN

CONSTRAINT: ADD SUPPLY cells

 CELL REFERENCE: ADD cells of LHS OF ROW

CONSTRAINT: ADD DEMAND cells

 SELECT SAMPLING METHOD: SIMPLEX LP

FACILITY LAYOUTS