Formulae Sheet for Operations Management

Exponential Smoothening Q Model with a Safety Stock

Ft = FITt-1 + α (At-1 - FIT t-1)

Tt = Tt-1 + δ (Ft - FIT t-1)

Qopt =
√ 2 DS
H
=

R = dL + zσ L
FITt = Ft + Tt σ L= √(L )σ 2
Decomposition Method No. of Orders = D/Q

b = (∑tyd) – (n) (Avg. t) (Avg. yd) / (∑t2) – (n) (Avg. Order Cycle = Working Days / Number of orders
t) 2 D Q
TC=DC+ S+ H
a = (Avg. yd) – b (Avg. t) Q 2
Y=a+bt
Centre of Gravity Method Production Model

∑ XQ
X co-ordinate = ∑Q QOPT =
√ 2DS
H (1-d/p)
=

∑ YQ D Q
TC = S + H (1-d/p )=
Y co-ordinate = ∑Q Total Cost: Q 2
Production Run = Q / p =
Load Distance Method
n
LD=∑ l i d i Number of production runs = D/Q =
i=1

√
d i= ( xi −x )2 + ( y i− y ) 2
Maximum Inventory Level = Q (1- d/p) =

P Model
Assembly Line Balancing:
q=d (T + L)+zσ T +L −I
C = production time per day/required output per day σ T +L =√(T +L )σ 2

Nt = T / C
Price Break Model
T
Efficiency = N a C
Q Model
EOQ =
2 DS
iC √
Qopt =
R = dL
H√
2 DS
= D Q
TC=DC+ S+ iC
Q 2

No. of Orders = D/Q Single Time Period Model

Order Cycle = Working Days / Number of orders Cu
D Q P≤
TC=DC+ S+ H C o +C u
Q 2
q = average demand + (z) (std. deviation)
p = total defectives / total sample observations =

The control limits are computed as follows: Put p= , z =

3, n = 100

UCL = p + z √ p (1− p)/n =

LCL = p – z √ p (1− p)/n =

C = Total number of defects/ total number of samples =

190 / 15 = 12.67

Put values of c = and z = 3

UCL = c + z √C =

LCL = c - z √ C =

(Process Capability Ration) Cp = Upper specification limit – lower specification limit / 6

Process Capability Index (Cpk) = minimum (x- lower

spec. limit / 3σ, upper spec. limit - x / 3σ)