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Supplement E - Special Inventory Models

Supplement E - Special Inventory Models. Special Inventory Models. Special Inventory Models. On-hand inventory. Time. Figure E.1. Special Inventory Models. Production quantity. Q. On-hand inventory. Time. Figure E.1. Special Inventory Models. Production quantity. Q.

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Supplement E - Special Inventory Models

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  1. Supplement E -Special Inventory Models

  2. Special Inventory Models

  3. Special Inventory Models On-hand inventory Time Figure E.1

  4. Special Inventory Models Production quantity Q On-hand inventory Time Figure E.1

  5. Special Inventory Models Production quantity Q Demand during production interval On-hand inventory p – d Time Figure E.1

  6. Production quantity Q Demand during production interval On-hand inventory p – d Time Figure E.1 Special Inventory Models

  7. Production quantity Q Demand during production interval On-hand inventory p – d Time Production and demand Demand only TBO Figure E.1 Special Inventory Models

  8. Production quantity Q Demand during production interval On-hand inventory p – d Time Production and demand Demand only TBO Figure E.1 Special Inventory Models

  9. Production quantity Q Demand during production interval Imax On-hand inventory Maximum inventory p – d Time Production and demand Demand only TBO Figure E.1 Special Inventory Models

  10. Production quantity Q Demand during production interval Imax On-hand inventory Maximum inventory Imax = (p – d) = Q( ) p – d p Q p p – d Time Production and demand Demand only TBO Figure E.1 Special Inventory Models

  11. Production quantity Q Demand during production interval Imax On-hand inventory Maximum inventory Imax 2 D Q C = (H) + (S) p – d Time Production and demand Demand only TBO Figure E.1 Special Inventory Models

  12. Production quantity Q Demand during production interval Imax On-hand inventory Maximum inventory C = ( ) + (S) Q p – d 2 p D Q p – d Time Production and demand Demand only TBO Figure E.1 Special Inventory Models

  13. Production quantity Q Demand during production interval Imax On-hand inventory Maximum inventory p p – d 2DS H ELS = p – d Time Production and demand Demand only TBO Figure E.1 Special Inventory Models

  14. Special Inventory Models Economic Production Lot Size

  15. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year Example E.1

  16. p p – d 2DS H ELS = Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year Example E.1

  17. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year 2(10,500)($200) $0.21 190 190 – 30 ELS = Example E.1

  18. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year 2(10,500)($200) $0.21 190 190 – 30 ELS = Example E.1

  19. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year 2(10,500)($200) $0.21 190 190 – 30 ELS = Example E.1

  20. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels Example E.1

  21. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels C = ( )(H) + (S) Q p – d 2 p D Q Example E.1

  22. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels C = ( ) ($0.21) + ($200) 10,500 4873.4 4873.4 190 – 30 2 190 Example E.1

  23. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels C = $430.91 + $430.91 Example E.1

  24. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels C = $861.82 Example E.1

  25. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels C = $861.82 ELS D TBOELS = (350 days/year) Example E.1

  26. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels C = $861.82 4873.4 10,500 TBOELS = (350 days/year) Example E.1

  27. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels C = $861.82 TBOELS = 162.4, or 162 days Example E.1

  28. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels ELS p Production time = C = $861.82 TBOELS = 162.4, or 162 days Example E.1

  29. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels 4873.4 190 Production time = C = $861.82 TBOELS = 162.4, or 162 days Example E.1

  30. Special Inventory Models Economic Production Lot Size Demand = 30 barrels/day Setup cost = $200 Production rate = 190 barrels/day Annual holding cost = $0.21/barrel Annual demand = 10,500 barrels Plant operates 350 days/year ELS = 4873.4 barrels Production time = 25.6, or 26 days C = $861.82 TBOELS = 162.4, or 162 days Example E.1

  31. Special Inventory Models Economic Production Lot Size Figure E.2

  32. Special Inventory Models Quantity Discounts

  33. 0 100 200 300 Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 Total cost (dollars) (a) Total cost curves with purchased materials added

  34. 0 100 200 300 Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 C for P = $4.00 C for P = $3.50 C for P = $3.00 Total cost (dollars) (a) Total cost curves with purchased materials added

  35. 0 100 200 300 Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 C for P = $4.00 C for P = $3.50 C for P = $3.00 Total cost (dollars) First price break Second price break (a) Total cost curves with purchased materials added

  36. 0 100 200 300 Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 C for P = $4.00 C for P = $3.50 C for P = $3.00 Total cost (dollars) First price break Second price break (a) Total cost curves with purchased materials added

  37. 0 100 200 300 Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 C for P = $4.00 C for P = $3.50 C for P = $3.00 PD for P = $4.00 Total cost (dollars) PD for P = $3.50 PD for P = $3.00 First price break Second price break (a) Total cost curves with purchased materials added

  38. 0 100 200 300 0 100 200 300 Purchase quantity (Q) Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 C for P = $4.00 C for P = $3.50 C for P = $3.00 Total cost (dollars) PD for P = $4.00 Total cost (dollars) PD for P = $3.50 PD for P = $3.00 First price break Second price break (a) Total cost curves with purchased materials added (b) EOQs and price break quantities

  39. 0 100 200 300 0 100 200 300 Purchase quantity (Q) Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 C for P = $4.00 C for P = $3.50 C for P = $3.00 PD for P = $4.00 Total cost (dollars) Total cost (dollars) PD for P = $3.50 PD for P = $3.00 First price break Second price break (a) Total cost curves with purchased materials added (b) EOQs and price break quantities

  40. 0 100 200 300 0 100 200 300 Purchase quantity (Q) Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 C for P = $4.00 C for P = $3.50 C for P = $3.00 Total cost (dollars) PD for P = $4.00 Total cost (dollars) PD for P = $3.50 PDfor P = $3.00 First price break Second price break First price break Second price break (a) Total cost curves with purchased materials added (b) EOQs and price break quantities

  41. 0 100 200 300 0 100 200 300 Purchase quantity (Q) Purchase quantity (Q) Special Inventory Models Quantity Discounts Figure E.3 EOQ 4.00 EOQ 3.50 EOQ 3.00 C for P = $4.00 C for P = $3.50 C for P = $3.00 Total cost (dollars) PD for P = $4.00 Total cost (dollars) PD for P = $3.50 PD for P = $3.00 First price break Second price break First price break Second price break (a) Total cost curves with purchased materials added (b) EOQs and price break quantities

  42. Special Inventory Models Quantity Discounts

  43. Order Quantity Price per Unit 0 – 299 $60.00 300 – 499 $58.80 500 or more $57.00 Special Inventory Models Quantity Discounts Annual demand = 936 units Ordering cost = $45 Holding cost = 25% of unit price Example E.2

  44. Order Quantity Price per Unit 0 – 299 $60.00 300 – 499 $58.80 500 or more $57.00 2DS H Special Inventory Models Quantity Discounts Annual demand = 936 units Ordering cost = $45 Holding cost = 25% of unit price EOQ57.00 = Example E.2

  45. Order Quantity Price per Unit 0 – 299 $60.00 300 – 499 $58.80 500 or more $57.00 Special Inventory Models Quantity Discounts Annual demand = 936 units Ordering cost = $45 Holding cost = 25% of unit price 2(936)(45) 0.25(57.00) EOQ57.00 = Example E.2

  46. Order Quantity Price per Unit 0 – 299 $60.00 300 – 499 $58.80 500 or more $57.00 Special Inventory Models Quantity Discounts Annual demand = 936 units Ordering cost = $45 Holding cost = 25% of unit price 2(936)(45) 0.25(57.00) EOQ57.00 = Example E.2

  47. Order Quantity Price per Unit 0 – 299 $60.00 300 – 499 $58.80 500 or more $57.00 Special Inventory Models Quantity Discounts Annual demand = 936 units Ordering cost = $45 Holding cost = 25% of unit price EOQ57.00 = 77 units Example E.2

  48. Order Quantity Price per Unit 0 – 299 $60.00 300 – 499 $58.80 500 or more $57.00 Special Inventory Models Quantity Discounts Annual demand = 936 units Ordering cost = $45 Holding cost = 25% of unit price EOQ57.00 = 77 units Example E.2

  49. Order Quantity Price per Unit 0 – 299 $60.00 300 – 499 $58.80 500 or more $57.00 Special Inventory Models Quantity Discounts Annual demand = 936 units Ordering cost = $45 Holding cost = 25% of unit price EOQ57.00 = 77 units Example E.2

  50. Order Quantity Price per Unit 0 – 299 $60.00 300 – 499 $58.80 500 or more $57.00 Special Inventory Models Quantity Discounts Annual demand = 936 units Ordering cost = $45 Holding cost = 25% of unit price EOQ57.00 = 77 units EOQ58.80 = 76 units Example E.2

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