INVENTORY MANAGEMENT

h ai, 1 h ng ời ột, 0 1 6:02 CH

Farm (Raw milk) => Transport to VNM factories: process => Finished product: keep in the warehourse => Transport to distributors
(wholesaler, retailer,..)

ABC ANALYSIS
Class A: giá trị hàng hóa cao nhất (70-80%) nhưng số lượng hàng hóa thấp nhất (10-15%)
Class B: giá trị hàng hóa (15-25%), số lượng hàng hóa (30%)
Class C: giá trị hàng hóa (5%), số lượng hàng hóa (50-55%)

Transport to VNM factories: process => place an order to the farms (đặt hàng từ farms): staff to place an order (pay wage), system to
place order (pay for cost for that system), communicate to the supplies, check the receiving product,… => ORDERING COST - chi phí đặt
hàng (Fix cost, does not depend on volume of each order, $/order)

Receive order, keep raw materials in the warehouse (WH) of VNM: WH to keep items (warehousing cost: renting kho, giá trị khấu hao),
facility to cary the item (facility cost: chi phí thiết bị trong kho), labor resource to manage that items (salary), investments for thoses
items (interest, chi phí cơ hội), pifferage and obsolescence (chi phí mất mát hư hỏng hết hạn) => HOLDING/CARRYING COST - chi phí
lưu kho

Total Inventory cost = Total ordering cost + Total holding/Carrying cost + Purchasing cost
= Total setup cost + Total holding/Carrying cost + Production cost

INVENTORY MODEL
BASIC ECONOMIC ORDER QUANTITY (EOQ)

+ TBO: Time beetween order (T)

ROP: Reorder point (thời điểm đặt hàng)

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 + TBO: Time beetween order (T)
ROP: Reorder point (thời điểm đặt hàng)
+ ROP = d*L = D/N*L
TBO = 1/N (year) = EOQ/D
= 52/N (week)
= 12/N (month)
Ordering cost - Fix cost (Unit: $/unit/time)
• Salary for order employees
• Cost for order system
• Inventory inquiries
• Utilities, phone bills, and so on, for the order
Holding/Carrying cost (Unit: $/order)
• Warehousing cost (thuê kho, giá trị khấu hao)
• Facility cost (chi phí thiết bị trong kho)
• Salaries for warehouse employees
• Pifferage and obsolescence
• Cost of capital, Insurance, Taxs, Interest, Opputunity cost
Setup cost (Unit: $/setup)
• Tool changing
• Warmup cost
• Cleaning cost
• Labor cost

PRODUCTION QUANTITY MODEL (POQ)

Q = Number of pieces per order

H = Holding cost per unit per year
p = Daily production rate (Tỷ lệ sản xuất hàng ngày)
d = Daily demand/usage rate (tỷ lệ nhu cầu hàng ngày)
t = Length of the production run in days (Thời gian sản xuất)

Total produced: Q = p.t

Maximum inventory level = p.t - d.t =
Average inventory =
Setup cost =

Holding cost =

Setup cost = Holding cost => Q* =

EXERCISE:

Q* = = = 282.84 or 283units

d = 4 = D/Number of days the plant is in operation = 1000/250

QUANTITY DISCOUNT MODELS

EXERCISE: Annual demand D = 5000 cars, S = 49$, Holding cost is 20% cost of the car

- Mua dưới 1000 sản phẩm -> không được discount -> P=5$
- Mua từ 1000-1999 sp -> discount 4% -> P=4.8$
- Mua TỪ 000 sp trở lên -> discount 5% -> P=4.75$

Step 1: Compute EOQ values for each discount

- EOQ1 = = 700 cars

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 - EOQ1 = = 700 cars

- EOQ2 = = 714 cars

- EOQ3 = = 718 cars

Step 2: Điều chỉnh lượng mua đề phù hợp với giá chiết khấu
- EOQ1 = 700 cars
- EOQ2 = 1000 cars (vì muốn hưởng giá chiết khấu là 4.8$ thì phải mua ít nhất 1000 cars)
- EOQ3 = 2000 cars (vì muốn hưởng giá chiết khấu là 4.75$ thì phải mua ít nhất 000 cars)
Step 3: Compute total cost
Discount Unit Ord Annual product cost Annual ordering cost Annual holding cost Total cost
number price quantity (P.D) (D/Q)*S (Q/2)*H
1 5 700 5000 * 5 = 25000 5000/700*49 = 350 700/2*(0.2*5) = 350 25700$
2 4.8 1000 5000 * 4.8 = 24000 245 1000/2*(0.2*4.8) = 480 24725$
3 4.75 2000 5000 * 4.75 = 23750 122.5 2000/2*(0.2*4.75) = 950 24822$

Choose the price and quantity that gives the lowest total cost => Buy 1,000 units at $4.80 per unit

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