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Between reorder point calculation when the lead time

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Unformatted text preview: en Reorder Point Calculation When the lead time is smaller than the cycle: When The order has to be ordered in advance of the end of a The cycle (lead time). In terms of on-hand inventory; cycle The reorder point R, is the product of the demand rate The and lead time. and R = λτ λτ 8 Example 4.1 Reorder Point Calculation When the lead time is larger than the cycle: When The lead time is larger than a single cycle. Form the ratio τ/T Consider only fractional remainder of the ratio. Multiply this fractional remainder by the cycle length. Multiply Multiply this result with demand rate to obtain the reorder point. reorder 9 Reorder Point Calculation for Lead Times Exceeding One Cycle Sensitivity Analysis Let G(Q) be the average annual holding and set-up cost Let up function given by G (Q) = K λ / Q + hQ / 2 and let G* be the optimal average annual cost. T...
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