MITESD_273JF09_lec02

MITESD_273JF09_lec02 - 1.270J Logistics and Distribution...

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1.270J Logistics and Distribution Systems Inventory and EOQ Models Agenda { Inventory { Reasons for holding inventory { Dimensions of inventory models { EOQ-type models { Basic model { EPQ model { Planned backorders { Quantity discounts 1
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Inventory inventory supply demand Inventory = cumulative supply cumulative demand Why hold inventories? { The transaction motive { Economies of scale: production, transportation, discount, replenishment, { Competition purpose { The precautionary motive { Demand uncertainty: unpredictable events { Supply uncertainty: lead time, random yield, { The speculative motive { Fluctuating value: ordering cost, selling price { Demand increase: seasonality, promotion, 2
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Dimensions of inventory models { Products { single product vs. multiple products { perishable or durable { Decision variables { when and how much to order { pricing { production and/or delivery schedule { capacity expansion { setup reduction { quality improvement { Decision making structure { single decision maker vs. multiple decision makers { Time {
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MITESD_273JF09_lec02 - 1.270J Logistics and Distribution...

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