Inventory

Chapter 3 Deterministic Single Stage Constant distress Inventory Mangement 3.1 EOQ Extension Backorder anyowed Assumptions: Same as EOQ. Shortage : greet of ?/item/ unit time. Observe: 39 Cycle damage for a cycle of length T Cycle monetary evaluate per unit time T C(Q, D) = ?T C(Q,D) ?S KD Q : K + CQ + hS + ?(Q?S) 2D 2D 2 2 : KD + CD + hS + ?(Q?S) Q 2Q 2Q 2 2 + CD + hS 2 2Q + ?(Q?S)2 2Q = hS ? ?(Q?S) = 0 Q Q ?hS = ?Q ? ?S ?Q ?S = h+? S ? ? Q = h+? (service level : proportion of get met from stock) ? ? ? From EOQ, we get : Q = S? = 2KD h ? ? h+? ? 2KD h ? h+? What if ? ? ? ? What if ? = 0 ? 3.2 EOQ Extension Quantity Discounts All units can: Q < q : salute : K + C1 Q Q ? q : Cost : K + C2 Q with C2 ? C1 Incremental bank usher out: Q < q : Cost : K + C1 Q Q ? q : Cost : K + C1 Q + C2 (Q ? q)+ with C2 ? C1 40 3.2.1 All units neglect T C1 (Q) = T C2 (Q) = ? Qc i = KD Q KD Q + + h1 Q 2 h2 Q 2 + C1 D + C1 D ? 2KD hi ? ? if Qc > q order Qc 2 2 ? if Qc 2 ?q andQc 1 ? q order { Qc if T C1 (Qc ) < T C2 (q) 1 1 q otherwise 41 3.2.

2 Incremental discount { Cost : ? ? K + C1 Q if Q < q K + (C1 ? C2 )q + C2 Q = K ? + C2 Q if Q ? q Q1 = Q2 = 2KD h 2K ? D h and Q2 > Q1 because K ? = K + (C1 ? C2 )q ? K Method : 1. trade man the expressions derived for C(Q) in T C(Q) and determine the minimum value of Q alike to each price interval. 2. Determine which minima ar realizable. comparing the value of the costs at the realizable EOQ values and pick out the lowest. 3.3 3.3.1 triplex Products Coordinating Orders Power of T wo Policies Suppose that we are social c! lub multiple items and would like to coordinate orders. Power-oftwo (PoT) policies affect reorder intervals to be PoT of base period. Again, recall : T C(Q) = KD + Q hQ 2 = K T + hT D 2 = f (T ) 42 Let g = hD 2 ? ? f (T ) = K + gT ? ?T ? we get : T = K g ?...If you expect to get a full essay, order it on our website: OrderEssay.net

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