Exam II review - student version

Exam II review - student version - Test 2 Thursday 6:30 p.m...

Info iconThis preview shows pages 1–14. Sign up to view the full content.

View Full Document Right Arrow Icon
Test 2 Thursday, March 24, 2011 6:30 p.m. to 7:30 p.m. Location: PHYS 112 No class on Tuesday, Mar 29 . 100 Total points 20 points for multiple choice Open book, open notes normal and other tables: A 2 , D 3 , D 4 will be provided No exchange of material Chapter 4 - Level & Chase & effects from setup time from Chapter 5 – All Chapter 6 – Everything except process capability
Background image of page 1

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

View Full DocumentRight Arrow Icon
What is OH – Quantity on backorder? A.) Lead time B.) On Hand Inventory C.) Physical stock D.) Inventory Level E.) Inventory Position
Background image of page 2
What is the “Time between placing and receiving order.” A.) Lead time B.) On Hand Inventory C.) Physical stock D.) Inventory Level E.) Inventory Position
Background image of page 3

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

View Full DocumentRight Arrow Icon
4 Lead time LT Time between placing and receiving order. On Hand Inventory OH Physical stock Inventory Level IL IL = OH – Quantity on backorder Inventory Position IP IP = IL + Quantity in transit Reminder: Definitions
Background image of page 4
What is the objective of the EOQ model ? A.) To determine order quantity (lot size) to minimize annual inventory cost. B.) To determine annual demand C.) To determine production capacity D.) To determine optimal inventory position
Background image of page 5

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

View Full DocumentRight Arrow Icon
6 1 The EOQ Model Economic Order Quantity Objective: To determine order quantity (lot size) to minimize annual inventory cost. 1 Annual demand is known, occurs at uniform rate. D: [ Q / T ]. 2 Ordering cost S is fixed for every order. S: [ $ ] 3 Holding cost H charged on average inventory H: [ $ / (Q*T) ] 4 Lot size Q fixed, delivered in one lot Q: [ Q ] 5 No shortages permitted. IL>=0 6 Lead-time ( LT ) does not vary : [ T ] Assumptions of basic EOQ Model IL = 0, IP = IL No shortages, IL 0. Order as soon as IP = 0
Background image of page 6
EOQ with discounts Ready Set Go
Background image of page 7

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

View Full DocumentRight Arrow Icon
8 D = 12000 units / year, S = $5, Holding cost per year: 20% A B C Lot size 1 to 399 400 to 699 700 & up Unit price $2.00 $1.75 $1.65 H .4 .35 .33 Q O 547.7 585.5 603 Lot size: Q* 399 585 700 Purchase $: 21000 19800 Ordering $: 102.56 85.71 Holding $: 102.38 115.5 Total $ 21204.94 20001.21 What is the best total annual cost? EPQ
Background image of page 8
What % of lee-way is given when rounding Q 0 to select a convenient Q* ? A.) +/- 10 % B.) +/- 2 % C.) +/- 5 % D.) +/- 15 %
Background image of page 9

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

View Full DocumentRight Arrow Icon
10 Annual inventory cost = ordering cost + holding cost AIC(Q 1 ) = S.D/Q 1 + H.Q 1 / 2 AIC(Q 2 ) = S.D/Q 2 + H.Q 2 / 2 Q 1 Inventory Q 2 Let optimal quantity be Q O . Q 0 = {2 * D * S / H} Round off Q 0 to within 5% to Q* Example 1.2 S = $140 , D = 12,000 units / year, P = $15 /unit. H = $3.6 per unit per year Lot size # of orders Ord. cost Avg. inv. Holding cost AIC Q 0 …966.1 12.421 1738.94 483.05 1738.98 3477.96 Q*… 1000 12 1680 500 1800 3480.00 Q 0 = {2 * 12000 * 140 / 3.6} = 966.1 Selected order lot size Q* = 1000 AIC(1000) = 140 * 12000 / 1000 + 3.6 * 1000 / 2 = 1680 + 1800 = $3480 S . (D/Q 0 ) = H . (Q 0 / 2) ordering cost = holding cost
Background image of page 10
If your Q 0 = 966.1, what might your order policy be? A.) [100, 900] B.) [1000, 0] C.) [0, 900] D.) [0,1000]
Background image of page 11

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

View Full DocumentRight Arrow Icon
12 Q 0 = 966.1 Policy [0,1000] Policy [0,1500] 2. At least 750 per lot? Ex 1.3: Variations of basic EOQ model 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 150 300 450 600 750 900 1050 1200 1350 1500 1650 1800 Lot Size (Q) Annual Costs 1. At least 1500 per lot? Policy [0,1000] 3. Sold in boxes (150 per box). …, 600, 750, 900, 1050, 1200,… 900 , 966.1 , 1050 , AIC(900) = 3486.67 AIC(1050) = 3490 Policy [0, 900]
Background image of page 12
When discussing order policy, does LT affect Q ?
Background image of page 13

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

View Full DocumentRight Arrow Icon
Image of page 14
This is the end of the preview. Sign up to access the rest of the document.