powepoint invetory management (2)

powepoint invetory management (2) - I NVENTORY MANAGEMENT...

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INVENTORY MANAGEMENT SINGLE PERIOD INVENTORY MODEL Supplement to Chapter 11
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INVENTORY MANAGEMENT Understand when to use the single-period model Analyze the costs and the cost trade-off in the model Apply the techniques to solve typical problems Discrete demand distribution Continuous demand distribution Learning Objectives
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INVENTORY MANAGEMENT Problem: Find the order quantity for sandwiches You are the new cafeteria manager in Samuel Bronfman Building. You are asked to make decisions about the sandwich section. The sandwiches are prepared early in the morning.  Unfortunately, you can not order again during the day, all  orders must be placed early in the morning Each sandwich costs $2 and sells at $5. Leftover sandwiches  can be sold at $1. Based on observations over the last 10 days, you collect the  following data for daily demand How much would you order? Circle one of the following. 3, 4, 5 or 6 Demand Last 10 days Probability. 3 4 5 6 2 days 2 days 2 days 4 days 0.2 0.2 0.2 0.4
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INVENTORY MANAGEMENT You started working as the new cafeteria manager in Samuel Bronfman Building It’s Friday, Exam Day Students don’t have much time They won’t wait for you to prepare a sandwich If nothing is ready they will head to super-sandwich. You are asked to make decisions about the sandwich section. The sandwiches are prepared early in the morning Unfortunately you can not order again during the day, all orders must be placed early in the morning Motivating Example
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INVENTORY MANAGEMENT You need to think about Purchase cost Selling price Uncertainty in demand Is there any value to leftovers? You need to decide on How much to order so as to maximize profit? Note that “When to order ?” is not a valid question anymore; you can only order once Motivating Example
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INVENTORY MANAGEMENT Marginal Analysis for Stock-and-Sell Decisions The Newsvendor’s Problem (A Single Period Inventory Model). A newsvendor is faced with the problem of deciding how many newspapers to order daily so as to maximize the daily profit The problem actually is very similar to the sandwich problem Daily demand ( d ) for newspapers is a random variable. No reordering is possible during a day, If the newsvendor orders fewer papers than customers demand he or she will lose the opportunity to sell some papers. If supply exceeds demand, the newsvendor will be stuck
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powepoint invetory management (2) - I NVENTORY MANAGEMENT...

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