1. Packaging

2. Purpose of Packaging Packaging Barrier Protection Physical Protection
Containment / Agglomeration
Packaging
Information Transmission
Security
Portion Control
Marketing

3. Material Handling Equipment in Packaging
PALLETS
CONTAINER

4. Unit Load
A number of items arranged in one unit

5. for ease of handling is known as unitization
Combination of boxes, cartons, packages, pails, etc., into one load or a PALLETISED LOADS
for ease of handling is known as unitization

6. Building Block Concept
The building block concept is the whole transformation process from a individual product becoming a unit load through unitisation and then being loaded onto containers for shipping. Characteristics include:
 It is a package of functionality defined to meet the business needs across an organization.
It has published interfaces to access the functionality.
It may interoperate with other, inter-dependent, building blocks.
A good building block has the following characteristics:
It considers implementation and usage, and evolves to exploit technology and standards.
It may be assembled from other building blocks.
It may be a subassembly of other building blocks.
Ideally a building block is re-usable and replaceable, and well. specified.
It may have multiple implementations but with different inter-dependent building blocks.

7. Inventory Management

8. Revisiting: EOQ Formula
EOQ = √(2AP/S) A = demand per time period (example: annual demand or monthly demand) S = carrying cost/holding cost of 1 unit of stock for one time period P = Order Cost EOQ – How much is the optimal quantity to order?

9. Example 1 EOQ = √(2AP/S) = √(2x800x200/2) = √(320000/2) = √160000
A company consumes 800 units of a component every year. Price per unit = Rs 10. Ordering cost per order is Rs 200. Inventory carry costs are 20% of total inventory turnover. Determine the optimal order quantity that will minimize total inventory cost [HINT: To determine carrying costs, consider 20% of price per unit] A = 800 S = 10 x 20/100 = 2 P = 200
EOQ = √(2AP/S)
= √(2x800x200/2)
= √(320000/2)
= √160000
= 400 units optimal order quantity

10. Re-Order Level (ROL)
A minimum amount of an item which a company holds in stock, such that, when stock falls to this amount, the item must be reordered
Re-order Level
= Lead Time Consumption + Safety Stock
Where,
Lead time consumption = lead time (in days) x Daily average Usage OR Consumption Rate

11. Example 2
ABC Ltd. is a retailer of footwear. It sells 500 units of one of a famous brand daily. Its supplier takes a week to deliver the order. ABC Ltd. has decided to hold a safety stock equivalent to average usage of 5 days. Calculate the reorder level. Lead time = 7 days Daily consumption or usage = 500 Safety usage = 500 x 5 = 2500 ROL = 500 x = = 6000

12. Example 3
Daily consumption of a raw material in the production process in 200 units. Lead time for delivery is 5 days. Company’s policy is to keep a safety stock to 3 days’ consumption. Calculate ROL Lead time = 5 Consumption of raw material = 200 Safety stock = 200x 3 = 600 ROL = 200 x = 1600 units

13. Example 4
Daily consumption of material ‘z’ is 500 units. The supplier takes 4 days for delivering the materials after the order is placed, What should be ROL? Lead time = 4 Consumption of material = 500 Safety stock = ? ROL = ?

14. Sources