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Objectives Of the Program
[object Object]
Overview ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Opposing Views of Inventory ,[object Object],[object Object]
Why We Want to Hold Inventories ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Why We Want to Hold Inventories ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Why We Do Not Want to Hold Inventories ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Inventory ,[object Object]
Nature of Inventory ,[object Object],[object Object],[object Object],[object Object],[object Object]
Two Fundamental Inventory Decisions ,[object Object],[object Object]
Independent Demand Inventory Systems ,[object Object],[object Object],[object Object]
Dependent Demand Inventory Systems ,[object Object],[object Object],[object Object]
Independent vs. Dependent Demand A Independent Demand (finished goods and spare parts) B(4) C(2) D(2) E(1) D(3) F(2) Dependent Demand (components)
Inventory Costs ,[object Object],[object Object],[object Object],[object Object]
Inventory Costs (continued) ,[object Object],[object Object],[object Object],[object Object]
Balancing Carrying against Ordering Costs Annual Cost ($) Order Quantity Minimum Total Annual Stocking Costs Annual Carrying Costs Annual Ordering Costs Total Annual Stocking Costs Smaller Larger Lower Higher EOQ
Inventory ,[object Object]
Fixed Order Quantity Systems ,[object Object],[object Object],[object Object]
Behavior of EOQ Systems ,[object Object],[object Object],[object Object],[object Object],[object Object]
Behavior of EOQ Systems ,[object Object],[object Object]
Determining Order Quantities ,[object Object],[object Object],[object Object]
Model I:  Basic EOQ  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Model I:  Basic EOQ ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Model I:  Basic EOQ ,[object Object],[object Object]
Example:  Basic EOQ ,[object Object],[object Object],[object Object],[object Object],[object Object]
Example:  Basic EOQ ,[object Object],[object Object],[object Object],[object Object],[object Object]
Example:  Basic EOQ ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Note: Total Carrying Cost equals Total Ordering Cost
Example:  Basic EOQ ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Note: This is the inverse of the formula above.
Model II:  EOQ for Production Lots ,[object Object],[object Object],[object Object]
Model II:  EOQ for Production Lots ,[object Object],[object Object],[object Object],[object Object]
Example:  EOQ for Production Lots ,[object Object],[object Object],[object Object],[object Object]
Example:  EOQ for Production Lots ,[object Object],[object Object],[object Object],[object Object],[object Object]
Example:  EOQ for Production Lots ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Note: Total Carrying Cost equals Total Ordering Cost
Example:  EOQ for Production Lots ,[object Object],[object Object],[object Object],[object Object],[object Object],Note: HEC will use 23% of the production lot by the time it receives the full lot.
Model III:  EOQ with Quantity Discounts ,[object Object],[object Object],[object Object],[object Object]
Model III:  EOQ with Quantity Discounts ,[object Object],[object Object],[object Object],[object Object]
Model III:  EOQ with Quantity Discounts ,[object Object],[object Object],[object Object],[object Object],[object Object]
Model III:  EOQ with Quantity Discounts ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example:  EOQ with Quantity Discounts ,[object Object],[object Object],[object Object],[object Object],[object Object]
Example:  EOQ with Quantity Discounts ,[object Object],[object Object],[object Object]
Example:  EOQ with Quantity Discounts ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example:  EOQ with Quantity Discounts ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Determining Order Points ,[object Object],[object Object],[object Object]
Basis for Setting the Order Point ,[object Object],[object Object],[object Object],[object Object]
Basis for Setting the Order Point ,[object Object],[object Object],[object Object],[object Object]
Basis for Setting the Order Point ,[object Object],[object Object],[object Object],[object Object],[object Object]
DDLT Distributions ,[object Object],[object Object],[object Object],[object Object],[object Object]
Setting Order Point for a Discrete DDLT Distribution ,[object Object],[object Object],[object Object]
Example:  OP for Discrete DDLT Distribution ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
OP for Discrete DDLT Distribution ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],.8
OP for Discrete DDLT Distribution ,[object Object],[object Object],[object Object],[object Object],[object Object]
Setting Order Point for a Continuous DDLT Distribution ,[object Object],[object Object],[object Object],[object Object]
Setting Order Point for a Continuous DDLT Distribution ,[object Object],[object Object],[object Object]
Setting Order Point for a Continuous DDLT Distribution ,[object Object],[object Object],[object Object]
[object Object],[object Object],Example: OP - Continuous DDLT Distribution
Example: OP - Continuous DDLT Distribution ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example: OP - Continuous DDLT Distribution ,[object Object],0 .833 Area = .2967 Area = .5 Area = .2033 z
Example: OP - Continuous DDLT Distribution ,[object Object],[object Object]
Example:  Setting Order Points ,[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],Rules of Thumb in Setting OP
Fixed Order Period Systems ,[object Object],[object Object]
Behavior of Economic Order Period Systems ,[object Object],[object Object],[object Object],[object Object]
Behavior of Economic Order Period Systems ,[object Object],[object Object],[object Object]
Determining the EOP ,[object Object]
Other Inventory Models ,[object Object],[object Object]
Hybrid Inventory Models ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Hybrid Inventory Models ,[object Object],[object Object],[object Object],[object Object],[object Object]
Single Period Inventory Models ,[object Object],[object Object],[object Object],[object Object]
Single Period Inventory Models ,[object Object],[object Object],[object Object],[object Object]
Some Realities of Inventory Planning ,[object Object],[object Object],[object Object]
ABC Classification ,[object Object],[object Object],[object Object]
ABC Classification ,[object Object],[object Object],[object Object],[object Object]
ABC Classification System ,[object Object],[object Object],[object Object],[object Object],[object Object],0 30 60 30 60 A B C % of  $ Value % of  Use
EOQ and Uncertainty ,[object Object],[object Object],[object Object]
EOQ and Uncertainty ,[object Object],[object Object]
Dynamics of Inventory Planning ,[object Object],[object Object],[object Object],[object Object]
Miscellaneous Systems: Optional Replenishment System Maximum Inventory Level, M M Actual Inventory Level, I q = M - I I Q = minimum acceptable order quantity Decision rule: If q  >  Q, order q, otherwise do not order any
Miscellaneous Systems:  Bin Systems Two-Bin System Full Empty Order One Bin of Inventory when one is emptied One-Bin System Periodic Check Order Enough to Refill Bin  (e.g. check book)
Wrap-Up: World-Class Practice ,[object Object],[object Object],[object Object]
End of Chapter 14

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inventory-management

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  • 13. Independent vs. Dependent Demand A Independent Demand (finished goods and spare parts) B(4) C(2) D(2) E(1) D(3) F(2) Dependent Demand (components)
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  • 16. Balancing Carrying against Ordering Costs Annual Cost ($) Order Quantity Minimum Total Annual Stocking Costs Annual Carrying Costs Annual Ordering Costs Total Annual Stocking Costs Smaller Larger Lower Higher EOQ
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  • 77. Miscellaneous Systems: Optional Replenishment System Maximum Inventory Level, M M Actual Inventory Level, I q = M - I I Q = minimum acceptable order quantity Decision rule: If q > Q, order q, otherwise do not order any
  • 78. Miscellaneous Systems: Bin Systems Two-Bin System Full Empty Order One Bin of Inventory when one is emptied One-Bin System Periodic Check Order Enough to Refill Bin (e.g. check book)
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