cl18_Inventory_Management_II

5 week after ordering costs and other conditions

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Unformatted text preview: per week – Orders arrive 0.5 week after ordering – Costs and other conditions unchanged 1) When to Reorder? 2) How Much to Order? 5 Stephen Shum Spring 2009 EOQ EOQ with Constant Demand and Positive Lead Time Ti Slope = D (units/yr) = d (units/day) Q Reorder Point: ROP = dL Point: ROP Reorder Point (ROP) Time Receive order order Place Receive order order Lead time L (days) Place Receive order order Lead time L (days) Example: Example: Sweater (Constant Demand and Positive Lead Time) Ti Back to Jenny’s fashion store… to Jenny fashion store… – Suppose demand is Constant with 100 per week – Orders arrive 0.5 week after ordering – Costs and other conditions unchanged 1) When to Reorder? 2) How Much to Order? Order? 7 Stephen Shum Spring 2009 Incorporating Demand Variability Incorporating Demand Variability Fixed-order quantity model order quantity model – Continuous review system (Event-triggered (Eventrestocking) – An order of a fixed quantity Q is placed every time the inventory falls below a reorder point ROP FixedFixed-time period model – Periodic review system (Time triggered restocking) – A quantity that depends on the current inventory on h...
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