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  • BA 181 Formula

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    sjhtanco
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    The document discusses concepts related to inventory management including: 1) It defines the annual setup cost, annual holding cost, order quantity, expected number of orders, total cost, and reorder point. 2) It provides formulas for calculating the annual inventory holding cost, maximum inventory level, order quantity as it relates to demand and holding costs, and reorder point. 3) It discusses how to calculate the standard deviation of demand during lead time and defines service level as it relates to cost of stockouts and cost of ordering.

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    BA-181-Formula

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    The document discusses concepts related to inventory management including: 1) It defines the annual setup cost, annual holding cost, order quantity, expected number of orders, total cost, and reorder point. 2) It provides formulas for calculating the annual inventory holding cost, maximum inventory level, order quantity as it relates to demand and holding costs, and reorder point. 3) It discusses how to calculate the standard deviation of demand during lead time and defines service level as it relates to cost of stockouts and cost of ordering.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    3 views2 pages

    BA 181 Formula

    Uploaded by

    sjhtanco
    The document discusses concepts related to inventory management including: 1) It defines the annual setup cost, annual holding cost, order quantity, expected number of orders, total cost, and reorder point. 2) It provides formulas for calculating the annual inventory holding cost, maximum inventory level, order quantity as it relates to demand and holding costs, and reorder point. 3) It discusses how to calculate the standard deviation of demand during lead time and defines service level as it relates to cost of stockouts and cost of ordering.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    𝐷

    1. 𝐴𝑛𝑛𝑢𝑎𝑙 𝑠𝑒𝑡𝑢𝑝 𝑐𝑜𝑠𝑡 = 𝑄


    𝑆
    𝑄
    2. 𝐴𝑛𝑛𝑢𝑎𝑙 ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 = 2
    𝐻
    * 2𝐷𝑆
    3. 𝑄 = 𝐻
    𝐷
    4. 𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑟𝑑𝑒𝑟𝑠 = 𝑁 = *
    𝑄
    𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑑𝑎𝑦𝑠 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
    5. 𝑇 = 𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑟𝑑𝑒𝑟𝑠
    𝐷 𝑄 𝐷 𝑄
    6. 𝑇𝐶 = 𝑄 𝑆 + 2 𝐻 or 𝑇𝐶 = 𝑄 𝑆 + 2
    𝐻 + 𝑃𝐷
    7. 𝑅𝑂𝑃 = 𝑑𝐿
    𝐷
    8. 𝑑 = 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑑𝑎𝑦𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟
    9. 𝐴𝑛𝑛𝑢𝑎𝑙 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 = (𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑙𝑒𝑣𝑒𝑙) * 𝐻𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
    𝑄 𝑑
    10. 𝐻𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 = 2
    𝐻[1 − ( 𝑝 )]
    𝑀𝑎𝑥𝑖𝑚𝑢𝑚 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑙𝑒𝑣𝑒𝑙
    11. 𝐴𝑛𝑛𝑢𝑎𝑙 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑙𝑒𝑣𝑒𝑙 = 2
    𝑑
    12. 𝑀𝑎𝑥𝑖𝑚𝑢𝑚 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑙𝑒𝑣𝑒𝑙 = 𝑝𝑡 − 𝑑𝑡 = 𝑄(1 − 𝑝
    )
    * 2𝐷𝑆
    13. 𝑄𝑝 = 𝑑
    𝐻[1− 𝑝 )]

    * 2𝐷𝑆
    14. 𝑄 = 𝐼𝑃
    15. 𝑅𝑂𝑃 = 𝑑 + 𝐿 + 𝑠𝑠
    16. 𝑅𝑂𝑃 = 𝑑𝑒𝑚𝑎𝑛𝑑 𝑑𝑢𝑟𝑖𝑛𝑔 𝑙𝑒𝑎𝑑 𝑡𝑖𝑚𝑒 + 𝑍σ𝑑𝐿𝑇 = (𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑑𝑎𝑖𝑙𝑦 𝑑𝑒𝑚𝑎𝑛𝑑 * 𝐿𝑒𝑎𝑑 𝑡𝑖𝑚𝑒 𝑖𝑛 𝑑𝑎𝑦𝑠) + 𝑍σ𝑑𝐿𝑇

    17. σ𝑑𝐿𝑇 = σ𝑑 𝐿𝑒𝑎𝑑 𝑡𝑖𝑚𝑒


    2 2
    18. σ𝑑𝐿𝑇 = (𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑙𝑒𝑎𝑑 𝑡𝑖𝑚𝑒 * σ 2) + (𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑑𝑎𝑖𝑙𝑦 𝑑𝑒𝑚𝑎𝑛𝑑) σ 𝐿𝑇
    𝑑
    𝐶𝑆
    19. 𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝑙𝑒𝑣𝑒𝑙 = 𝐶𝑆+𝐶𝑂

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