Assignment Ch12(c) The Dine Corporation is both a producer and a user of brass couplings. The firm operates 220 days a year and uses the couplings at a.

Slides:



Advertisements
Similar presentations
Assignment Ch12a.1 Problem 1: A toy manufacturer uses approximately silicon chips annually. The Chips are used at a steady rate during the 240 days.
Advertisements

Operations Management
EOQ for Production not Order (EPQ) We do not buy the product. We produce it. Total demand / year is D Demand / day or consumption rate is u Production.
Inventory Modeling Concepts
Inventory Management for Independent Demand Chapter 12, Part 2.
Chapter 13 - Inventory Management
12 Inventory Management.
1 Chapter 15 Inventory Control  Inventory System Defined  Inventory Costs  Independent vs. Dependent Demand  Basic Fixed-Order Quantity Models  Basic.
Topic 6. INVENTORY MANAGEMENT
Managerial Decision Modeling with Spreadsheets
Inventory Management A Presentation by R.K.Agarwal, Manager (Finance), PFC.
Operations Management
Chapter 11, Part A Inventory Models: Deterministic Demand
Chapter 9 Inventory Management.
C 11 Inventory Management
Assignment; Basic Inventory Model
Inventory Control Models
Lecture 5 Project Management Chapter 17.
Lectures in Macroeconomics- Charles W. Upton What Business Cycles Cost Us Part 2.
Production Lot Size Models
Inventory Models  3 Models with Deterministic Demand Model 1: Regular EOQ Model Model 2: EOQ with Backorder Model 3: EPQ with Production  2 Models with.
Assignment Ch12(b) A small manufacturing firm uses approximately 3400 pounds of chemical dye per year. Currently the firm purchases 300 pounds per order.
Chapter 13 - Inventory Management
Independent Demand Inventory 1. Inventory Firms ultimately want to sell consumers output in the hopes of generating a profit. Along the way to having.
Inventory Models Production Lot Size Models. PRODUCTION LOT SIZE MODELS In a production lot size model, we are a manufacturer, trying to determine how.
MEANING  Inventory-A physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state.  Inventory.
MNG221- Management Science –
Assignment 4: Part (A) Problem 1: A toy manufacturer uses approximately silicon chips annually. The Chips are used at a steady rate during the 240.
McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 12 Inventory Management.
Ordering and Carrying Costs
Inventory Management Chapter 13.
___________________________________________________________________________ Quantitative Methods of Management  Jan Fábry Inventory Models EOQ Model with.
BA 301 Operations Management Spring 2003 Inventory Management Chapter 12 Continued.
Economic Order Quantity
13-1 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
___________________________________________________________________________ Operations Research  Jan Fábry Inventory Models EOQ Model with Planned Shortages.
Copyright 2011 John Wiley & Sons, Inc. Chapter 9 Inventory Management 9-1.
ECONOMIC FOUNDATIONS OF FINANCE BASIC ELEMENTS OF THE THEORY OF CAPITAL.
Economic Order Quantity The economic order quantity (EOQ) is the fixed order quantity (Q) that minimizes the total annual costs of placing orders and holding.
Mohamed Iqbal Pallipurath12 – 1 Operations Management Inventory Management Mohamed Iqbal Pallipurath Industrial Management,
 1. PURCHASE COST.  2. CAPITAL COST.  3. ORDERING COST.  4. INVENTORY CARRING COST.  5. SHORTAGE COST.
Chapter 12 – Independent Demand Inventory Management Operations Management by R. Dan Reid & Nada R. Sanders 2 nd Edition © Wiley 2005 PowerPoint Presentation.
LSM733-PRODUCTION OPERATIONS MANAGEMENT By: OSMAN BIN SAIF LECTURE 18 1.
The Economic Production Quantity (EPQ) Model
BUAD306 Chapter 13 - Inventory Management. Everyday Inventory Food Gasoline Clean clothes… What else?
What types of inventories business carry, and why they carry them.
Problem 6.7 Flow rate R = 150,000 lbs/ yr Purchasing cost = $1.50 Also add shipping cost (sh) sh: Q
McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 12 Inventory Management.
PRODUCTION PLANNING AND PROCESS PLANNING Unit-3. PRODUCT PLANNING Product Planning is the ongoing process of identifying and articulating market requirements.
Chapter 13 - Inventory Management
Inventory Models Assumptions of EOQ model Shortages are allowed
Example ( In terms of Percentage)
BUSI 104 Operations Management
Lecture 23 Order Quantities
EOQ Model 2/26/2016.
Assignment 5: Part (A) The Dine Corporation is both a producer and a user of brass couplings. The firm operates 220 days a year and uses the couplings.
Key Inventory Terms Lead time: Holding (carrying) costs:
Stevenson 13 Inventory Management.
Chapter 13 - Inventory Management
EOQ for Production not Order (EPQ)
إدارة المخزون Inventory Management
GSCM 530 Innovative Education--snaptutorial.com
الجزء الثالث دراسة السوق.
Inventory planning and control
With a cycle inventory of 1500 units for each outlet.
DPT 335 PRODUCTION PLANNING & CONTROL
EOQ Inventory Management
a) Total cost of the current policy
Number of orders/yr = R/Q = 1560/300 = 5.2
PRODUCTION PLANNING AND PROCESS PLANNING
Presentation transcript:

Assignment Ch12(c) The Dine Corporation is both a producer and a user of brass couplings. The firm operates 220 days a year and uses the couplings at a steady rate of 50 per day. u = 50. Coupling can be produced at rate of 200 per day. p=200. Annual storage cost is $1 per coupling, H=1, and machine setup cost is $35 per run, S=35. Since there are 220 days per year and u is equal to 50, therefore yearly demand is 50(220), D= 11000 Determine the economic run size. Approximately how many runs per year will there be? Compute the maximum inventory level. Determine the cycle time, run time and pure consumption time. Compute the total cost

Production, Consumption, Inventory

EPQ: One period and One year p-u u One Period One Year

Imax, Ordering Cost and Carrying Cost

EPQ : Optimal Q

The Problem The Dine Corporation is both a producer and a user of brass couplings. The firm operates 220 days a year and uses the couplings at a steady rate of 50 per day. u = 50. Coupling can be produced at rate of 200 per day. p=200. Annual storage cost is $1 per coupling, H=1, and machine setup cost is $35 per run, S=35. Since there are 220 days per year and u is equal to 50, therefore yearly demand is 50(220), D= 11000 Determine the economic run size. Approximately how many runs per year will there be? Compute the maximum inventory level. Determine the cycle time, run time and pure consumption time. Compute the total cost

EPQ and # of Runs u =50, p=200, H=1, S=35, D= 11000 Determine the economic run size. Approximately how many runs per year will there be? D/Q = 11000/1013 = 10.85

Run Time How much do we produce each time? Q How long does it take to produce Q? d1 What is our production rate per day? p Run Time? Q = pd1  1013 = 200d1 d1= 1013/200 = 5.06 p-u u I max d1 d2

Maximum Inventory Maximum Inventory ? At what rate inventory is accumulated? p-u For how long? d1 What is the maximum inventory? IMax IMax = (p-u)d1 IMax = (200-50)(5.06) = 759 p-u u I max d1 d2

IMax Pure Consumption Time What is the Maximum inventory? How long does it take to consume IMax ? d2 At which rate Imax is consumed for d2 days u Imax = ud2 759 = 50d2 d2 = 15.18 p-u u I max d1 d2

Cycle Time, Total Cost Cycle Time ? d1 + d2 = 5.06 + 15.18 = 20.24 TC = H(IMax/2) + S(D/Q) TC = 1(759/2) + 35 (11000/1013) TC = 379.5 + 379.5 = 759