{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Prob_Inventory_Class_A (1)

Prob_Inventory_Class_A (1) - Managing Class A Inventories...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
1 1 Managing Class A Managing Class A Inventories Inventories IE 251 IE 251 2 Base Stock Policies If there is no significant setup/order cost, or If there is no limit on the number of replenishments that can be placed in a year, or If demand is low (slow moving items) Then , order one at a time! Different names for the same policy – (s,Q) policy with lot/order size Q=1 – One-for-one replenishment policy – (S-1,S) policy, S=base-stock level=s+1 Note that Inventory position is always S=s+1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 3 Base Stock for Slow-Moving / Expensive Items Conditions for Q = 1 : ( ) ( ) 2 (1) ( ) 2 ( ) (2) 2 ambivalent between Q=1 & Q=2 when ( ) ( ) 2 2 ( ) ( ) 2 2 1 if E( ) = + = + = + + = + = = = Q AE D TRC Q vr Q vr TRC AE D AE D TRC vr vr AE D AE D vr vr AE D AE D vr vr Q D A 4 Base Stock for Slow-Moving / Expensive Items B 2 criterion / Q = 1 : – all on-order stock arrives by t+L »net stock = n = S-x L »P NS (n) = P{x L =S-n} – for Poisson demand »P{a particular demand is back ordered} = (0) ( ) = L NS x P P S
Background image of page 2