inventory management ppt
DESCRIPTION
TRANSCRIPT
![Page 1: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/1.jpg)
Inventory ManagementInventory Management
![Page 2: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/2.jpg)
![Page 3: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/3.jpg)
![Page 4: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/4.jpg)
![Page 5: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/5.jpg)
![Page 6: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/6.jpg)
![Page 7: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/7.jpg)
![Page 8: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/8.jpg)
![Page 9: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/9.jpg)
![Page 10: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/10.jpg)
![Page 11: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/11.jpg)
![Page 12: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/12.jpg)
Demand Demand raterate
TimeTimeLead Lead timetime
Lead Lead timetime
Order Order placedplaced
Order Order placedplaced
Order Order receiptreceipt
Order Order receiptreceipt
Inve
nto
ry L
evel
Inve
nto
ry L
evel
Reorder point, Reorder point, RR
Order quantity, Order quantity, QQ
00
![Page 13: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/13.jpg)
CCoo - cost of placing order - cost of placing order DD - annual demand - annual demand
CCcc - annual per-unit carrying cost - annual per-unit carrying cost QQ - order quantity - order quantity
Annual ordering cost =Annual ordering cost =CCooDD
Annual carrying cost =Annual carrying cost =CCccQQ
22
Total cost = +Total cost = +CCooDD
CCccQQ
22
![Page 14: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/14.jpg)
TC = +CoD
Q
CcQ
2
= +CoD
Q2
Cc
2
TC
Q
0 = +C0D
Q2
Cc
2
Qopt =2CoD
Cc
Deriving Qopt Proving equality of costs at optimal point
=CoD
Q
CcQ
2
Q2 =2CoD
Cc
Qopt =2CoD
Cc
![Page 15: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/15.jpg)
Order Quantity, Order Quantity, QQ
Annual Annual cost ($)cost ($) Total CostTotal Cost
Carrying Cost =Carrying Cost =CCccQQ
22
Slope = 0Slope = 0
Minimum Minimum total costtotal cost
Optimal orderOptimal order QQoptopt
Ordering Cost =Ordering Cost =CCooDD
![Page 16: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/16.jpg)
![Page 17: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/17.jpg)
QQ(1-(1-d/pd/p))
InventoryInventorylevellevel
(1-(1-d/pd/p))QQ22
TimeTime00
OrderOrderreceipt periodreceipt period
BeginBeginorderorder
receiptreceipt
EndEndorderorder
receiptreceipt
MaximumMaximuminventory inventory levellevel
AverageAverageinventory inventory levellevel
![Page 18: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/18.jpg)
pp = production rate = production rate dd = demand rate = demand rate
Maximum inventory level =Maximum inventory level = QQ - - dd
== QQ 1 - 1 -
QQpp
ddpp
Average inventory level = Average inventory level = 1 - 1 -QQ22
ddpp
TCTC = + 1 - = + 1 -ddpp
CCooDD
CCccQQ
22
QQoptopt = =22CCooDD
CCcc 1 - 1 - ddpp
![Page 19: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/19.jpg)
TCTC = + + = + + PDPDCCooDD
CCccQQ
22
wherewherewherewhere PP = per unit price of the item = per unit price of the itemDD = annual demand = annual demand
PP = per unit price of the item = per unit price of the itemDD = annual demand = annual demand
![Page 20: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/20.jpg)
QQoptopt
Carrying cost Carrying cost
Ordering cost Ordering cost
Inve
ntor
y co
st (
$)In
vent
ory
cost
($)
QQ((dd1 1 ) = 100) = 100 QQ((dd2 2 ) = 200) = 200
TC TC ((dd2 2 = $6 ) = $6 )
TCTC ( (dd1 1 = $8 )= $8 )
TC TC = ($10 )= ($10 ) ORDER SIZE PRICE
0 - 99 $10
100 – 199 8 (d1)
200+ 6 (d2)
![Page 21: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/21.jpg)
RR = = dLdL
![Page 22: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/22.jpg)
ReorderReorderpoint, point, RR
LTLT
TimeTimeLTLT
Inve
nto
ry le
vel
Inve
nto
ry le
vel
00
![Page 23: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/23.jpg)
ReorderReorderpoint, point, RR
LTLT
TimeTimeLTLT
Inve
nto
ry le
vel
Inve
nto
ry le
vel
00
Safety Stock
![Page 24: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/24.jpg)
RR = = dLdL + + zzdd L L
wherewhere
dd == average daily demandaverage daily demandLL == lead timelead time
dd == the standard deviation of daily demand the standard deviation of daily demand zz == number of standard deviationsnumber of standard deviations
corresponding to the service levelcorresponding to the service levelprobabilityprobability
zzdd L L == safety stocksafety stock
wherewhere
dd == average daily demandaverage daily demandLL == lead timelead time
dd == the standard deviation of daily demand the standard deviation of daily demand zz == number of standard deviationsnumber of standard deviations
corresponding to the service levelcorresponding to the service levelprobabilityprobability
zzdd L L == safety stocksafety stock
![Page 25: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/25.jpg)
Probability of Probability of meeting demand during meeting demand during lead time = service levellead time = service level
Probability of Probability of a stockouta stockout
RR
Safety stock
ddLLDemandDemand
zd L
![Page 26: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/26.jpg)
The carpet store wants a reorder point with a 95% The carpet store wants a reorder point with a 95% service level and a 5% stockout probabilityservice level and a 5% stockout probability
dd = 30 yards per day= 30 yards per dayLL = 10 days= 10 days
dd = 5 yards per day= 5 yards per day
For a 95% service level, For a 95% service level, zz = 1.65 = 1.65
RR = = dLdL + + zz dd L L
= 30(10) + (1.65)(5)( 10)= 30(10) + (1.65)(5)( 10)
= 326.1 yards= 326.1 yards
Safety stockSafety stock = = zz dd L L
= (1.65)(5)( 10)= (1.65)(5)( 10)
= 26.1 yards= 26.1 yards
![Page 27: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/27.jpg)
QQ = = dd((ttbb + + LL) + ) + zzdd ttbb + + LL - - II
wherewhere
dd = average demand rate= average demand ratettbb = the fixed time between orders= the fixed time between orders
LL = lead time= lead timedd = standard deviation of demand= standard deviation of demand
zzdd ttbb + + LL = safety stock= safety stock
II = inventory level= inventory level
![Page 28: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/28.jpg)
![Page 29: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/29.jpg)
![Page 30: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/30.jpg)
![Page 31: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/31.jpg)
![Page 32: inventory management ppt](https://reader037.vdocuments.site/reader037/viewer/2022102922/54bdc9b84a79593f5e8b466e/html5/thumbnails/32.jpg)