Production_Lot_Size_Model

Production_Lot_Size_Model - D = 10,000 yd per 311working...

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PRODUCTION LOT SIZE MODEL Inventory Level Maximum Inventory Level = Q (1 - D / P ) Average Inventory Level = Q (1 - D / P )/2 Q 0 Time Inventory Cycle Q / P = Q / D Q(D / P) Production Run Average Inventory
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C o = Setup Cost in $/production run C h = Inventory Holding Cost in $/item/year Q = Batch or Lot size per production run Relationships: Production Run Time = Q/p Maximum Inventory Level = Q (1 - d / p ) = Q( 1 - D/P) Annual Setup Cost = C o ( D/Q ) Annual Holding Cost = C h ( Q( 1 - D/P) /2) Annual Holding and Setup Cost = C o ( D / Q ) + C h ( Q (1 - D / P )/2) Economic Production Lot Size: ) / 1 ( 2 * P D C D C Q h o - = Cost as a Function of Batch Size
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Example: Example: Annual Demand,
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Unformatted text preview: D = 10,000 yd per 311working day Inventory Carrying Cost, C h = $0.75/yd/yr Setup Cost, C o = $150 Production Rate, p = 150 yd/day yd 8 . 256 , 2 ) 311 ( 150 10000 1 75 . ) 000 , 10 )( 150 ( 2 1 2 = -= -= P D C D C Q h o Opt days 05 . 15 day / yd 50 1 yd 8 . 2256 Time Run Production 43 . 4 8 . 2256 10000 year, per runs production of Number $1,329 1 2 * * * * * min = = = = = = = -+ = p Q Q D N P D Q C Q D C TC h o...
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This note was uploaded on 10/18/2010 for the course MACAU macau taught by Professor Macau during the Spring '10 term at University of Macau.

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Production_Lot_Size_Model - D = 10,000 yd per 311working...

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