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Org/10.1007/ _787 68 Downloads, how to cite, the quantity to order from supplier to replenish inventory in an important decision in material/inventory management.
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Inventory Control Decisions 8 Even though there are literally millions of different types of products manufactured in our society, there are only two fundamental decisions that you have to make when controlling inventory:.However, as the value of Q increases, the carrying cost increases because the firm has to maintain larger average inventories.Note in Slide 23 that Q* occurs at the point where the ordering cost curve and the carrying cost curve intersect.Demand 1,000 Alarm Clocks per Year sbobet promotion code 2016 250 Working Days in the Year Lead Time for Orders is 3 Working Days ROP d x L d D Number of Working Days in a Year 1,000/250 4 Units per Day x 3 Days 12 Units Reorder Point.Average Inventory under DOQ DOQ units.
70 ELS Production Time per Lot p ELS D Annual Demand in Units for the Inventory Item S Setup or Ordering Cost per Order H Holding or Carrying Cost per Unit per Year p production rate d daily demand.
Ordering Cost The cost of placing an order and receiving goods.
On January 1, 2014, the store received an offer of 15 discount on orders of 300 or more units.This model is still used by a large number of organizations today.Total Cost Curve for the Quantity Discount Model.As the discount quantity goes up, the item cost goes down, but the carrying cost increases because the order sizes are large.68 ELS - Total Annual Cost S EL p dp 2 ELS C D Annual Demand in Units for the Inventory Item S Setup or Ordering Cost per Order H Holding or Carrying Cost per Unit per Year p production rate d daily demand.
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