Multi-item EOQ With Storage Limitation

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Presentation transcript:

Multi-item EOQ With Storage Limitation Deals with (n>1) items No Shortage Items are competing for a limited storage space

Multi-item EOQ With Storage Limitation

Multi-item EOQ With Storage Limitation

Multi-item EOQ With Storage Limitation Step1: Compute unconstrained optimal values of the order quantities Step2: If storage constraint is satisfied, it is the optimal solution. Otherwise, goto step 3 Step3: Compute constrained order quantity by modifying denominator in formula to hi-2λ*ai [Using Lagrange’s Multiplier’s Method] λ = 0 gives unconstrained solution Soln (.xls) Soln(.pdf)

Exercise A machine shop produces three products 1,2 and 3 in lots. The shop has a warehouse whose total floor area is 4,000 sq.metres. The relevant data for the three items is given below: Item 1 2 3 Annual Demand 500 400 600 Cost Per Unit 30 20 70 Set up Cost 800 1000 Floor Area Reqd 5 4 10

Exercise Ans: λ= .835 Item 1 = 236 Units Item 2 = 211 Units Area Consumed = 3,994