Exam II review - student version

Now we will consider probabilistic demand models we

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100% service level. Now we will consider probabilistic demand models. We will have occasional shortages and service level may be less than 100% No. Model type 5 When to reorder fixed amount Q: Re-order point model (Q system, continuous review system ) 6 How much to order at a fixed time: Fixed order interval model (P system, periodic review system ) 7 Single period model (Newsvendor)
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In the Q system, when inventory position falls below a specified value ( ROP ) , what should be done? A.) Calculate days of stock in inventory B.) Back order C.) Dip into safety stock D.) Place an order
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5. Q system: Continuous Review System. Inventory is reviewed continuously (from practical point of view, we may do this every morning). When inventory position falls below a specified value (called reorder point: ROP ) , we place an order. We will assume that We will order a fixed quantity (Q). Lead time is fixed. Shortages are made up by backordering. Order Q units when IP ROP Demand may vary from day to day and shortages can occur occasionally while we wait for an order to arrive. We will start with a manual example. 38
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