Simple Model

(Q,r) Solver © Factory Physics 2001-2014 WARNING: FOR INSTRUCTIONAL PURPOSES ONLY. USE IN INDUSTRY IS NOT ADVISED.

98% Desired service

ci Di LTi AvgRTDi StDevRTDi Qi ri Fi Si Bi Ii Di(1-Si)

Order
Replenishment Standard Reorder Reorder Frequency
Cost Demand Lead Time Time Demand Deviation of Quantity Point (orders per Backorder Average OnHand Stockouts
Part(i) ($/unit) (units/yr) (days) (units) RTD (units) (units) (units) year) Fill Rate Level Inventory per Year
4X8 3/4" Ash 100 100 60 16.4 4.1 25 17 4.0 #VALUE! #VALUE! #VALUE! #VALUE!
2X12 10' Pine 250 500 30 41.1 6.4 125 83 4.0 #VALUE! #VALUE! #VALUE! #VALUE!
2X4 Stud bndl 20 50 100 13.7 3.7 12.5 8 4.0 #VALUE! #VALUE! #VALUE! #VALUE!
4X8 1/4" util 10 100 15 4.1 2.0 25 17 4.0 #VALUE! #VALUE! #VALUE! #VALUE!
1X4 10' Pine 100 1000 30 82.2 9.1 250 167 4.0 #VALUE! #VALUE! #VALUE! #VALUE!
1750 20.0 #VALUE! #VALUE! #VALUE! #VALUE!

Key
input data (parameters and constraints)
policy variables
performance measures (order frequency, average service, average backorders, inv. Investment, stockouts per year)

Problem: min inventory investment

s.t. Ave Order Freq <= F = 20
Fill Rate >= S = 0.98

Notation: ci unit cost of part i

Di annual demand for part i
LTi replenishment lead time for part i
AvgLTDi average demand during replenishment lead time for part i
StDevLTDi std dev of demand during replenishment lead time for part i
Qi order quantity for part i
ri reorder point for part i
Fi average order frequency (number of orders per year) for part i
Si average service level (fraction of demands filled from stock) for part i
Bi average backorder level (ave number of orders waiting to be filled) for part i
Ii average inventory level for part i (in dollars)

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 Simple Model

ss ROP ROQ Fill Rate90%

5 32 20 z 1.28
8 76 150
5 27 200
3 9 300
12 148 50

Page 2