Ch12_INVENTORYReorder_Point

# Ch12_INVENTORYReorder_Point - day per period per(units rate...

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Page 571 Reorder Point (ROP): Under Certainty ) as units time same (in time Lead LT per week) day, per period, per (units rate Demand where LT ROP d d d = = × = Chapter 12 Inventory Management Reorder Point=When the quantity on hand of an item drops to this amount, the item is reordered.

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Page 571 Example 7 Tingly takes a Two-a-Day vitamins, which are delivered to his home by a routeman seven days after an order is called in. Annual usage is 730 tablets, ordering cost per order is \$1, and inventory carrying cost is \$2 per tablet per year. (a) What is the fixed order quantity (EOQ)? (b) At what point should Tingly reorder? ) as units time same (in time Lead LT per week)
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Unformatted text preview: day, per period, per (units rate Demand where time Lead x Usage LT ROP d d d = = = × = Usage (Demand rate )=d = 2 vitamins per day Lead time =LT = 7 days Reorder Point (ROP)= Usage x Lead time =2 vitamins per day x7 days =14 vitamins (tablets) Thus, Tingly should order when 14 vitamin tablets are left, order 27 tablets tablets 01 . 27 2 1 * 730 * 2 2 = = = H DS Q D= 730, S= \$1 , H= \$2 Page 573 Reorder Point (ROP): Uncertainty demand time lead of deviation standard The deviations standard of Number * time lead during demand Expected (ROP) Point Reorder = = + = dLT dLT z where z σ Safety Stock...
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## This note was uploaded on 01/11/2012 for the course MANAGEMENT mgt3904 taught by Professor Ye during the Winter '11 term at Assumption College.

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Ch12_INVENTORYReorder_Point - day per period per(units rate...

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