Agenda. TPPE37 Manufacturing Control. A typical production process. The Planning Hierarchy. Primary material flow
|
|
- Stephany Heath
- 8 years ago
- Views:
Transcription
1 TPPE37 Manufacturing Control Agenda Lecture 2 Inventory Management 1. Inventory System Defined 2. Inventory Costs 3. Inventory classification 4. Economic order quantity model 5. Newsboy problem 6. Reorder point system 1 2 The Planning Hierarchy A typical production process Master planning Demand management Final assembly schedule Sales and operations planning Production planning Master prod. schedule Resource planning Master (production) scheduling Rough-cut capacity plan Front end Feedback Material planning Detailed capacity planning Engine Primary material flow Vendor Shop floor Back end Raw material supplier Manufacturer End-product manufacturer Distributor Retailer 3 4
2 Inventory Why we hold inventory? Replenishment (Production or purchasing) The acumulated result when Demand replenishmnet Demand (external or internal demand) Economies of scale Uncertainty in supply and demand Speculation Transportation Smoothing production/purchasing Logistics Cost of controlling inventory Inventory 5 6 Different types of inventory Inventory Theoretical inventory to to maintain a process flow Cycle inventory for for economies of of scale Seasonal inventory for for uneven demand Speculation inventory for for price variation Where do we hold inventory? suppliers and manufacturers warehouses and distribution centers retailers Types of inventory WIP and subassemblies raw materials finished goods Safety inventory to to avoid stockout 7 8
3 Why inventory management is important? Independent vs. Dependent Demand Total investment in inventory is 20-25% of the total annual GNP. In the last quarter of 1999, total investment on inventories is $1.37 trillion in US 34% in Manufacturing 26% in Retail 22% in Wholesale 8% in Farm 10% in Other Independent Demand (Demand for the final end-product or demand not related to other items) Finished product E(1) Dependent Demand (Derived demand items for component parts, subassemblies, raw materials, etc) 9 Component parts 10 Classification of inventory Inventory Costs Deterministic Dependent demand Stochastic Inventory Deterministic Independent demand Stochastic Holding costs Physical holding cost (out-of-pocket) Financial holding cost (opportunity cost) Setup (or production change) costs Ordering costs Shortage costs Multi echelon MRP, etc Multi echelon System nervousness rescheduling, etc EOQ, lot sizing, etc Newsboy, control (S, s), (S, Q), etc 11 12
4 Economic order quantity Decision problem Constant rate of demand. (D) Immediate replenishment (no lead time, L=0) No shortage allowed Constant ordering cost (K) Constant inventory holding cost (H) Q inventory T Slope=-D time Objective function (Ordering costs + Inventory holding costs) Decision variable Order quantity Q Parameter Orderingcost(K) and holding cost (H) Constraint Positive order quantity Cost Minimization EOQ model The Total-Cost Curve is U-Shaped Annual Cost Q D TC = H + K 2 Q EOQ = Q* = 2KD H Ordering Costs Q* (optimal order quantity) Order Quantity (Q) 15 16
5 EOQ Example EOQ Example A Swedish tea shop imports green tea from China Demand = 2000 units/year Cost to place an order = 1000 SEK Value of tea = 250 SEK/unit Holding cost per unit per year = 25 SEK/year 2KD 2(2000 )(1000) Q* = = = 400 units H 25 Total ordering cost = /400 =5000 Total holding cost = /2 = Stochastic inventory The newsboy problem Single period problems Newsboy model Multi-period problems Continuous review (s, Q) Periodic review (R, S) Major assumptions Single selling season One order placed prior to or at the beginning of that period Uncertainty of demand, but the distribution of demand is known Costs are known Applications Newsvendor: newspaper, magazines Style goods: fashion clothes, some seasonable/holiday goods, sports fan items Perishable good: Christmas trees, food and medical items 19 20
6 Description Notation A newspaper vendor wishes to determine the number of copies of newspaper he should purchase each day. A study of historical data showed that the demand during any day is a random variable that approximately normally distributed, with mean and standard deviation Each copy is purchased for 2.5 SEK and sold for 7.5 SEK, and he is paid 1 SEK for each unsold copy by his supplier. D: demand, a continuous nonnegative random variable Q: order quantity, decision variable f(x): probability density function (pdf) of random variable D F(x): cumulative distribution function (cdf), df(x)/dx=f(x) h: overage cost for the remaining product, SKE/unit b: underage cost for unsatisfied demand, SEK/unit Overage and underage costs Optimal policy Cost of overage h: purchase cost - salvage value The optimal solution, Q*, occurs when F ( Q*) = b /( b + h) Cost of underage b: lost profit: selling price purchase cost or, lost profit + any additional penalty f(x) area = F ( Q * ) µ Q* 23 24
7 Area under the normal distribution Numerical example A newspaper vendor (Cont.) Demand is normally distributed with mean µ = and standard deviation σ = inventory cost is h = = 1.5 SEK. The stockout cost is b = = 5 SEK The critical ratio is b/(b+h) =.50 /.65 =.77. Using the table of normal distribution, we obtain a standardised value of Z = The optimal number of purchasing copy is Q* = Zσ + u= = Numerical example -results More examples Results Hence, the number of copies should be able to satisfy all of the daily demand with probability This is also called type 1 service level. The optimal Q* is the 77th percentile of the demand distribution. f(x) Serv1 The Christmas tree vendor: how many trees should be purchased? The cafeteria manager: how many hot meal should be prepared? The blood bank: how many donations of blood should be sought? The farmer: what quantity of a particular crop should be planted?... area = F ( Q * ) µ Q* 27 28
8 Inventory Control Systems Continuous review A replenishment control system is to address the following issues How often the inventory status should be determined? When a replenishment order should be placed? How large the replenishment order should be? Assumptions Inventory status is always known It provides stable service level and uses less safety stock It is expensive for fast-moving items Periodic review Order-point, order-quantity (s, Q) system Assumptions Inventory status is not updated until the next review time There is considerable uncertainty between review interview Review interval is often determined by the physical constraints It is easy to coordinate orders of different items It is easy to estimate workloads s+q s 0 This is a continuous review model L Inventory level 31 32
9 (s, Q) system - ordering policy Periodic-review, order-up-to-level (R, S) system Policy: A fixed quantity Q is ordered when inventory position drops to or below the reorder point s It is also called a two-bin system S This is a periodic review review model Advantage It is very simple The production of supplier is predictable Disadvantage It does not cope effectively with sudden-large orders 0 L R L R L Net inventory/inventory position (R, S) system - ordering policy Buffer mechanism - safety stock Policy: At every review interval R, enough is ordered to raise inventory position to level S. The reorder point has a close relation with safety stock s= xˆ + SS= xˆ + Z σ L L L It is also called replenishment cycle system Advantage It takes advantage when items are sharing resource, or have a coordination opportunity It is easy to adjust the level S Disadvantage It often has a higher inventory holding cost compared with the continuous system xˆ -expected demand over a lead time L SS - Safety stock Z - Safety factor σ L - Standard deviation of the forecasting error over lead time Methods to determine Z: Simple-minded method Minimising costs Service level 35 36
10 Safety stock - service level approach Example the tea shop again Cycle service level rule: Select safety factor Z so that the area under normal distribution= Serv1 Demand D = 2000 units/year = 38.5 units/week Lead time L = 1 week Standard deviatino of demand s L = 12 Serv1 = 0.95 From the table, Z=1.64 SS = Zs L = 1.64µ12= s= 38.5 µ = The tea shop how to manage it? Multi-item management Using an (s, Q) model Auditing your inventory level When it is reduced to 41 units, place a new order = 400 units ABC classification (Pareto analysis) 39 40
INVENTORY MANAGEMENT. 1. Raw Materials (including component parts) 2. Work-In-Process 3. Maintenance/Repair/Operating Supply (MRO) 4.
INVENTORY MANAGEMENT Inventory is a stock of materials and products used to facilitate production or to satisfy customer demand. Types of inventory include: 1. Raw Materials (including component parts)
More informationSupply Chain Management: Inventory Management
Supply Chain Management: Inventory Management Donglei Du Faculty of Business Administration, University of New Brunswick, NB Canada Fredericton E3B 9Y2 (ddu@umbc.edu) Du (UNB) SCM 1 / 83 Table of contents
More informationMATERIALS MANAGEMENT. Module 9 July 22, 2014
MATERIALS MANAGEMENT Module 9 July 22, 2014 Inventories and their Management Inventories =? New Car Inventory Sitting in Parking Lots Types of Inventory 1. Materials A. Raw material B. WIP C. Finished
More informationOperations Management
11-1 Inventory Management 11-2 Inventory Management Operations Management William J. Stevenson CHAPTER 11 Inventory Management 8 th edition McGraw-Hill/Irwin Operations Management, Eighth Edition, by William
More informationUd Understanding di inventory issues
Lecture 10: Inventory Management Ud Understanding di inventory issues Definition of inventory Types of inventory Functions of inventory Costs of holding inventory Introduction to inventory management Economic
More informationInventory Management. Topics on inventory management
Inventory Management ISyE 3104 Fall 2013 Topics on inventory management Objective An introduction to the fundamental concepts, tradeoffs and methods in inventory management Topics Deterministic inventory
More informationChapter 9. Inventory management
Chapter 9 Inventory management Slack et al s model of operations management Direct Design Operations Management Deliver Develop Supply network management Capacity management Inventory management Planning
More informationInventory Management - A Teaching Note
Inventory Management - A Teaching Note Sundaravalli Narayanaswami W.P. No.2014-09-01 September 2014 INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD-380 015 INDIA Inventory Management - A Teaching Note Sundaravalli
More informationInventory Management and Risk Pooling. Xiaohong Pang Automation Department Shanghai Jiaotong University
Inventory Management and Risk Pooling Xiaohong Pang Automation Department Shanghai Jiaotong University Key Insights from this Model The optimal order quantity is not necessarily equal to average forecast
More informationInventory Control Subject to Known Demand
Production and Operation Managements Inventory Control Subject to Known Demand Prof. JIANG Zhibin Department of Industrial Engineering & Management Shanghai Jiao Tong University Contents Introduction Types
More informationChapter 12 Inventory Control and Management
Chapter 12 Inventory Control and Management Learning Outcomes Describe the functions and costs of an inventory system. Determine the order quantity and Economic Order Quantity. Determine the reorder point
More informationAgenda. Managing Uncertainty in the Supply Chain. The Economic Order Quantity. Classic inventory theory
Agenda Managing Uncertainty in the Supply Chain TIØ485 Produkjons- og nettverksøkonomi Lecture 3 Classic Inventory models Economic Order Quantity (aka Economic Lot Size) The (s,s) Inventory Policy Managing
More informationInventory Theory. 25.1 Inventory Models. Chapter 25 Page 1
Chapter 25 Page 1 Inventory Theory Inventories are materials stored, waiting for processing, or experiencing processing. They are ubiquitous throughout all sectors of the economy. Observation of almost
More informationSupply Chain Analysis Tools
Supply Chain Analysis Tools MS&E 262 Supply Chain Management April 14, 2004 Inventory/Service Trade-off Curve Motivation High Inventory Low Poor Service Good Analytical tools help lower the curve! 1 Outline
More informationCHAPTER 6 AGGREGATE PLANNING AND INVENTORY MANAGEMENT 명지대학교 산업시스템공학부
CHAPTER 6 AGGREGATE PLANNING AND INVENTORY MANAGEMENT 명지대학교 산업시스템공학부 Learning Objectives You should be able to: Describe the hierarchical operations planning process in terms of materials planning & capacity
More informationTeaching Manual-Operation Management. Gunadarma University. Week : 9 Subject : INVENTORY MANAGEMENT Content :
Week : 9 Subject : INVENTORY MANAGEMENT Content : WHY INVENTORY a. One of the most expensive assets of many companies representing as much as 50% of total invested capital b. Operations managers must balance
More information講 師 : 周 世 玉 Shihyu Chou
講 師 : 周 世 玉 Shihyu Chou Logistics involves the following activities: sourcing and purchasing inputs, managing inventory, maintaining warehouses, and arranging transportation and delivery. There are three
More informationGESTION DE LA PRODUCTION ET DES OPERATIONS PICASSO EXERCICE INTEGRE
ECAP 21 / PROD2100 GESTION DE LA PRODUCTION ET DES OPERATIONS PICASSO EXERCICE INTEGRE 2004-2005 Prof : Pierre Semal : semal@poms.ucl.ac.be Assistants : Eléonore de le Court : delecourt@poms.ucl.ac.be
More informationAntti Salonen KPP227 - HT 2015 KPP227
- HT 2015 1 Inventory management Inventory management concerns short-range decisions about supplies, inventories, production levels, staffing patterns, schedules and distribution. The decisions are often
More informationInventory Management: Fundamental Concepts & EOQ. Chris Caplice ESD.260/15.770/1.260 Logistics Systems Oct 2006
Inventory Management: Fundamental Concepts & EOQ Chris Caplice ESD.260/15.770/1.260 Logistics Systems Oct 2006 Agenda Wrap up of Demand Forecasting Fundamentals of Inventory Management Economic Order Quantity
More informationINVENTORY Systems & Models
INVENTORY Systems & Models OPERATIONS MANAGEMENT Lecture 13 Prepared by: A.H.M Fazle Elahi, Lecturer, Dept. of ME, KUET Elements of an Inventory System: Specification of an Inventory System (Cont d) I.
More informationAbstract: Why inventory exists. Types of inventory. This is sequel to OM 601 assignment.
Abstract: This is sequel to OM 601 assignment. The reason for this assignment is to improve overall competitiveness of Hefley Finland by focusing on inventory management. In this assignment I first clarify
More informationAgenda. Real System, Transactional IT, Analytic IT. What s the Supply Chain. Levels of Decision Making. Supply Chain Optimization
Agenda Supply Chain Optimization KUBO Mikio Definition of the Supply Chain (SC) and Logistics Decision Levels of the SC Classification of Basic Models in the SC Logistics Network Design Production Planning
More informationTema 4: Supply Chain Management
Tema 4: Supply Chain Management Logistics 1 Supplier Manufacturer Warehouse Retailer Customer Tema basado en: Supply Chain Management: Strategy, Planning, and Operations, Sunil Copra and Peter Meindl (Editors).
More informationGlossary of Inventory Management Terms
Glossary of Inventory Management Terms ABC analysis also called Pareto analysis or the rule of 80/20, is a way of categorizing inventory items into different types depending on value and use Aggregate
More informationContracts. David Simchi-Levi. Professor of Engineering Systems
Introduction to Stochastic Inventory Models and Supply Contracts David Simchi-Levi Professor of Engineering Systems Massachusetts Institute of Technology Introduction Outline of the Presentation The Effect
More informationSupply Chain Inventory Management Chapter 9. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 09-01
Supply Chain Inventory Management Chapter 9 09-01 What is a Inventory Management? Inventory Management The planning and controlling of inventories in order to meet the competitive priorities of the organization.
More informationInventory Management and Risk Pooling
CHAPTER 3 Inventory Management and Risk Pooling CASE JAM Electronics: Service Level Crisis JAM Electronics is a Korean manufacturer of products such as industrial relays. The company has five Far Eastern
More informationManaging Service Inventory
Managing Service Inventory Shin Ming Guo NKFUST Reasons to Hold Inventory Inventory Models ABC Classification News Vendor Problem Hospitals and Inventory Management Control Barcodes and computers keep
More informationLot size/reorder level (Q,R) Models
Lot size/eorder level, Models Esma Gel, Pınar Keskinocak, 0 ISYE 0 Fall 0 ecap: Basic EO Inventory It -d =d T d T T T T Lead time time Place an order when the inventory level is. The order arrives after
More informationInventory: Independent Demand Systems
Inventory: Independent Demand Systems Inventory is used in most manufacturing, service, wholesale, and retail activities and because it can enhance profitability and competitiveness. It is widely discussed
More informationOperations Management. 3.3 Justify the need for Operational Planning and Control in a selected Production Process
Operations Management 3.3 Justify the need for Operational Planning and Control in a selected Production Process Key Topics LO3 Understand how to organise a typical production process 3.3 justify the need
More informationChapter 14 Inventory Management
Chapter 14 Inventory Management Overview Nature of Inventories Opposing Views of Inventories Fixed Order Quantity Systems Fixed Order Period Systems Other Inventory Models Some Realities of Inventory Planning
More informationInventory Theory 935
19 Inventory Theory Sorry, we re out of that item. How often have you heard that during shopping trips? In many of these cases, what you have encountered are stores that aren t doing a very good job of
More informationSmall Lot Production. Chapter 5
Small Lot Production Chapter 5 1 Lot Size Basics Intuition leads many to believe we should manufacture products in large lots. - Save on setup time - Save on production costs Costs associated with Lots
More informationUniversidad del Turabo MANA 705 DL Workshop Eight W8_8_3 Aggregate Planning, Material Requirement Planning, and Capacity Planning
Aggregate, Material Requirement, and Capacity Topic: Aggregate, Material Requirement, and Capacity Slide 1 Welcome to Workshop Eight presentation: Aggregate planning, material requirement planning, and
More informationChapter 12. Inventory Management. Operations Management - 5 th th Edition. Roberta Russell & Bernard W. Taylor, III.
Chapter 1 Inventory Management Operations Management - 5 th th Edition Roberta Russell & Bernard W. Taylor, III Copyright 006 John Wiley & Sons, Inc. Beni Asllani University of Tennessee at Chattanooga
More informationThe Newsvendor Model
The Newsvendor Model Exerpted form The Operations Quadrangle: Business Process Fundamentals Dan Adelman Dawn Barnes-Schuster Don Eisenstein The University of Chicago Graduate School of Business Version
More informationAfter this unit you should be able to answer following questions A. Concept Questions B. Short notes 1. Inventory and Inventory management 2.
After this unit you should be able to answer following questions A. Concept Questions B. Short notes 1. Inventory and Inventory management 2. Lead time 3. Reserve stock and safety stock 4. Reorder level
More informationPRINCIPLES OF INVENTORY AND MATERIALS MANAGEMENT
PRINCIPLES OF INVENTORY AND MATERIALS MANAGEMENT Fourth Edition Richard J. Tersine The University of Oklahoma TEGHNISCHE HOCHSCHULE DARMSTADT Fochbereich 1 Gesonr> 11-. ib I iothek Betiier >wi rtschottsiehre
More informationPackage SCperf. February 19, 2015
Package SCperf February 19, 2015 Type Package Title Supply Chain Perform Version 1.0 Date 2012-01-22 Author Marlene Silva Marchena Maintainer The package implements different inventory models, the bullwhip
More informationBy: ATEEKH UR REHMAN 12-1
12 Inventory Management By: ATEEKH UR REHMAN 12-1 Inventory Management The objective of inventory management is to strike a balance between inventory investment and customer service 12-2 Importance of
More informationBasics of Supply Chain Management (BSCM) Curriculum
Basics of Supply Chain Management (BSCM) Curriculum Version 4.0 Session 1 to Supply Chain Management to Manufacturing Role of Manufacturing Global Citizenship Manufacturing Business Model Business Environment
More informationStandard Work for Optimal Inventory Management
Standard Work for Optimal Inventory Management Putting practical science to work Presenter Edward S. Pound COO, Factory Physics Inc. 27 years in manufacturing JVC manufacturing engineering Honeywell (AlliedSignal)
More informationAlessandro Anzalone, Ph.D. Hillsborough Community College, Brandon Campus
Alessandro Anzalone, Ph.D. Hillsborough Community College, Brandon Campus 1. Introduction 2. Basic Concepts of Inventory 3. Categories of Inventory 4. The Basic Inventory Lot Sizing Model Economic Order
More informationINDUSTRIAL STATISTICS AND OPERATIONAL MANAGEMENT. 7. Inventory Management
INDUSTRIAL STATISTICS AND OPERATIONAL MANAGEMENT 7. Inventory Management Dr. Ravi Mahendra Gor Associate Dean ICFAI Business School ICFAI HOuse, Nr. GNFC INFO Tower S. G. Road Bodakdev Ahmedabad-380054
More informationInventory Control. Contents 1. FRAMEWORK OF PLANNING DECISIONS...1
Inventory Control When to order? How many to order? Contents 1. FRAMEWORK OF PLANNING DECISIONS...1 2. INVENTORY CONTROL...2 2.1 CONTROL SYSTEMS...3 2.2 PARAMETERS...4 2.3 COSTS...5 3. INVENTORY CONTROL:
More informationMaterial Requirements Planning. Lecturer: Stanley B. Gershwin
Material Requirements Planning Lecturer: Stanley B. Gershwin MRP Overview Primary source: Factory Physics by Hopp and Spearman. Basic idea: Once the final due date for a product is known, and the time
More informationInventory Management. Multi-Items and Multi-Echelon. Chris Caplice ESD.260/15.770/1.260 Logistics Systems Nov 2006
Inventory Management Multi-Items and Multi-Echelon Chris Caplice ESD.260/15.770/1.260 Logistics Systems Nov 2006 Advanced Topics So far, we have studied single-item single location inventory policies.
More informationMODELLING OF COORDINATING PRODUCTION AND INVENTORY CYCLES IN A MANUFACTURING SUPPLY CHAIN INVOLVING REVERSE LOGISTICS
MODELLING OF COORDINATING PRODUCTION AND INVENTORY CYCLES IN A MANUFACTURING SUPPLY CHAIN INVOLVING REVERSE LOGISTICS Submitted by Jonrinaldi to the University of Exeter as a thesis for the degree of Doctor
More informationIntroduction. How Important Is Inventory Control?
PUBLICATION 420-148 Lean Inventory Management in the Wood Products Industry: Examples and Applications Henry Quesada-Pineda, Assistant Professor, Wood Science and Forest Products, and Business and Manufacturing
More informationChapter 9 Managing Inventory in the Supply Chain
Chapter 9 Managing Inventory in the Supply Chain Inventory is an asset on the balance sheet and inventory cost is an expense on the income statement. Inventories impacts return on asset (ROA) Inventory
More informationInventory Management
Crash Course on: Inventory Management Inventories today: a curse, a blessing, a must..? 1 Course programme: 1. Why do we keep inventories? 2. Typical demand classifications and analyses helpful in inventory
More informationChapter 1 Introduction to Inventory Replenishment Planning
Chapter 1 Introduction to Inventory Replenishment Planning Chapter Contents OVERVIEW... 7 IMPACT OF INVENTORY... 7 FUNCTION OF INVENTORY... 8 SUMMARY OF FUNCTIONALITY... 9 REFERENCES... 10 6 Chapter 1.
More informationMaterial Requirements Planning (MRP)
Material Requirements Planning (MRP) Unlike many other approaches and techniques, material requirements planning works which is its best recommendation. Joseph Orlicky, 1974 1 History Begun around 1960
More informationChapter 7. Production, Capacity and Material Planning
Chapter 7 Production, Capacity and Material Planning Production, Capacity and Material Planning Production plan quantities of final product, subassemblies, parts needed at distinct points in time To generate
More informationCourse Supply Chain Management: Inventory Management. Inventories cost money: Reasons for inventory. Types of inventory
Inventories cost money: Inventories are to be avoided at all cost? Course Supply Chain Management: Or Inventory Management Inventories can be useful? Chapter 10 Marjan van den Akker What are reasons for
More informationChapter 6. Inventory Control Models
Chapter 6 Inventory Control Models Learning Objectives After completing this chapter, students will be able to: 1. Understand the importance of inventory control and ABC analysis. 2. Use the economic order
More informationMaterial Requirements Planning MRP
Material Requirements Planning MRP ENM308 Planning and Control I Spring 2013 Haluk Yapıcıoğlu, PhD Hierarchy of Decisions Forecast of Demand Aggregate Planning Master Schedule Inventory Control Operations
More informationInventory basics. 35A00210 Operations Management. Lecture 12 Inventory management. Why do companies use inventories? Think about a Siwa store
35A00210 Operations Management Lecture 12 Inventory management Lecture 12 Inventory management Inventory basics Inventory basics Pros and cons of inventory Inventory numbers Inventory management in practice
More informationNumber of methodological EUPA_LO_005_M_006. Work Area Code and Title 2.1 OFFICE PROCEDURES. Learning Outcome Number and Title
Number of methodological EUPA_LO_005_M_006 Tool Work Area Code and Title 2.1 OFFICE PROCEDURES Unit Code and Title 2.1.2 Handle the stock Learning Outcome Number and Title LO005: Be able to maintain the
More informationINVENTORY MANAGEMENT
7 INVENTORY MANAGEMENT MGT2405, University of Toronto, Denny Hong-Mo Yeh Inventory management is the branch of business management that covers the planning and control of the inventory. In the previous
More informationMaterial Requirements Planning (MRP)
The Priority Enterprise Management System Material Requirements Planning (MRP) Contents MRP - Introduction...2 Calculating Demand for Top-Level Parts...2 Calculating Demand for Sub-assemblies and Raw Materials...3
More informationDependent vs Independent Demand. The Evolution of MRP II. MRP II:Manufacturing Resource Planning Systems. The Modules In MRP II System
MRP II:Manufacturing Resource Planning Systems IE 505: Production Planning Control Lecture Notes* Rakesh Nagi University at Buffalo * Adapted in part from Lecture Notes of Dr. George Harhalakis, University
More informationApplying Actual Usage Inventory Management Best Practice in a Health Care Supply Chain
Applying Actual Usage Inventory Management Best Practice in a Health Care Supply Chain Vijith Varghese #1, Manuel Rossetti #2, Edward Pohl #3, Server Apras *4, Douglas Marek #5 # Department of Industrial
More informationtutor2u Stock Control The Importance of Managing Stocks AS & A2 Business Studies PowerPoint Presentations 2005
Stock Control The Importance of Managing Stocks AS & A2 Business Studies PowerPoint Presentations 2005 What Are Stocks? Three main categories of stocks Raw Materials Work in Progress Finished Goods Types
More informationMaterials Management and Inventory Systems
Materials Management and Inventory Systems Richard J.Tersine Old Dominion University 'C & North-Holland PUBLISHING COMPANY NEW YORK AMSTERDAM Contents Preface Chapter 1 INTRODUCTION 1 Inventory 4 Types
More informationChapter 7 Production Planning
Production Planning and Control Chapter 7 Production Planning Professor JIANG Zhibin Dr GRANG Na Department of Industrial Engineering & Management Shanghai Jiao Tong University Contents Introduction Master
More informationLogistics Management Inventory Cycle Inventory. Özgür Kabak, Ph.D.
Logistics Management Inventory Cycle Inventory Özgür Kabak, Ph.D. Role of Inventory in the Supply Chain Improve Matching of Supply and Demand Improved Forecasting Reduce Material Flow Time Reduce Waiting
More informationA Decision-Support System for New Product Sales Forecasting
A Decision-Support System for New Product Sales Forecasting Ching-Chin Chern, Ka Ieng Ao Ieong, Ling-Ling Wu, and Ling-Chieh Kung Department of Information Management, NTU, Taipei, Taiwan chern@im.ntu.edu.tw,
More information1.3 ERP System Evolution
1.3 ERP System Evolution Learning Objectives State the purpose of enterprise resource planning (ERP) systems List the challenges facing the industry List the development stages of the manufacturing planning
More informationInventory Management & Optimization in Practice
Inventory Management & Optimization in Practice Lecture 16 ESD.260 Logistics Systems Fall 2006 Edgar E. Blanco, Ph.D. Research Associate MIT Center for Transportation & Logistics 1 Session goals The challenges
More informationCHAPTER 11. 357 Definition of Inventory Inventory defined
CHAPTER 11 I NVENTORY MANAGEMENT Learning Objectives LO1 LO2 LO3 LO4 LO5 LO6 Explain the different purposes for keeping inventory. Understand that the type of inventory system logic that is appropriate
More informationE217 Inventory Management (4 Modular Credits)
E17 Inventory Management ( Modular Credits) This document addresses the content related abilities, with reference to the module. Abilities of learning, thinking, problem solving, teamwork, communication,
More informationSpreadsheet Heuristic for Stochastic Demand Environments to Solve the Joint Replenishment Problem
, July 3-5, 2013, London, U.K. Spreadsheet Heuristic for Stochastic Demand Environments to Solve the Joint Replenishment Problem Buket Türkay, S. Emre Alptekin Abstract In this paper, a new adaptation
More informationBasics of inventory control
35A00210 Operations Management Lecture 13 control Lecture 13 control Basics of inventory control models continuous review periodic review other models Basics of inventory control control is boring but
More informationWorking Capital Management
Working Capital Management Helena SůvovS vová Guest lecture for the Czech University of Agriculture November,, 2009 1 Content of the lecture Working Capital Terminology Working Capital Decisions Cash Conversion
More informationA Cross-Functional View of Inventory Management, Why Collaboration among Marketing, Finance/Accounting and Operations Management is Necessary
A Cross-Functional View of Inventory Management, Why Collaboration among Marketing, Finance/Accounting and Operations Management is Necessary Richard E. Crandall, Appalachian State University, John A.
More informationStrategic Framework to Analyze Supply Chains
Strategic Framework to Analyze Supply Chains 1 Andy Guo A Strategic Framework for Supply Chain Design, Planning, and Operation Part I: Understand the supply chain Part II: Supply chain performance Part
More informationInventory Management, Just-in-Time, and Backflush Costing
Inventory Management, Just-in-Time, and Backflush Costing Inventory Management in Retail Organizations Inventory Management is planning coordinating controlling activities related to the flow of inventory
More informationDemand forecasting & Aggregate planning in a Supply chain. Session Speaker Prof.P.S.Satish
Demand forecasting & Aggregate planning in a Supply chain Session Speaker Prof.P.S.Satish 1 Introduction PEMP-EMM2506 Forecasting provides an estimate of future demand Factors that influence demand and
More informationLogistics Management Customer Service. Özgür Kabak, Ph.D.
Logistics Management Customer Service Özgür Kabak, Ph.D. Customer Service Defined Customer service is generally presumed to be a means by which companies attempt to differentiate their product, keep customers
More informationKey Concepts: Week 8 Lesson 1: Inventory Models for Multiple Items & Locations
Key Concepts: Week 8 Lesson 1: Inventory Models for Multiple Items & Locations Learning Objectives Understand how to use different methods to aggregate SKUs for common inventory policies Understand how
More informationProject and Production Management Prof. Arun Kanda Department of Mechanical Engineering Indian Institute of Technology, Delhi
Project and Production Management Prof. Arun Kanda Department of Mechanical Engineering Indian Institute of Technology, Delhi Lecture - 38 Basic Inventory Principles In today s lecture we are going to
More informationINFLUENCE OF DEMAND FORECASTS ACCURACY ON SUPPLY CHAINS DISTRIBUTION SYSTEMS DEPENDABILITY.
INFLUENCE OF DEMAND FORECASTS ACCURACY ON SUPPLY CHAINS DISTRIBUTION SYSTEMS DEPENDABILITY. Natalia SZOZDA 1, Sylwia WERBIŃSKA-WOJCIECHOWSKA 2 1 Wroclaw University of Economics, Wroclaw, Poland, e-mail:
More informationIT-375 using the 6 th Edition PRODUCTION AND INVENTORY CONTROL CHAPTER 1: INTRODUCTION TO MATERIALS MANAGEMENT
IT-375 using the 6 th Edition PRODUCTION AND INVENTORY CONTROL CHAPTER 1: INTRODUCTION TO MATERIALS MANAGEMENT What is wealth? GDP = production = profits What is the source of wealth? The conversion process
More informationInventory Management. NEELU TIWARI Jaipuria Institute of Management, Vasundhara Gzb.
INTERNATIONAL JOURNAL OF BUSINESS MANAGEMENT, ECONOMICS AND INFORMATION TECHNOLOGY Vol. 3, No. 2, July-December 2011: 303-207 Inventory Management NEELU TIWARI Jaipuria Institute of Management, Vasundhara
More informationID Class MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Exam: Operations Management Name Total Scors: ID Class MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following incorporates the
More informationMoving Parts Planning Forward
2013 Moving Parts Planning Forward In less than six months, we ve reduced our inventory by more than $75,000 and expect to reduce it by $150,000 by the end of the first year. Valogix e-report Series www.valogixinventoryplanning.com
More informationReorder level = demand during lead time = lead time x demand per unit time ROL = LT x D
Reorder Level Additional assumption: Lead time is known and constant No need to carrying stock from one cycle to the next So each order should be scheduled to arrive as existing stock runs out Reorder
More informationOperations and Supply Chain Management Prof. G. Srinivasan Department of Management Studies Indian Institute of Technology, Madras
Operations and Supply Chain Management Prof. G. Srinivasan Department of Management Studies Indian Institute of Technology, Madras Lecture - 36 Location Problems In this lecture, we continue the discussion
More informationSingle item inventory control under periodic review and a minimum order quantity
Single item inventory control under periodic review and a minimum order quantity G. P. Kiesmüller, A.G. de Kok, S. Dabia Faculty of Technology Management, Technische Universiteit Eindhoven, P.O. Box 513,
More informationJob Manager for Tool and Die Shops
Job Manager for Tool and Die Shops What makes Tool and Die Shops unique? First, most orders are for a unique Tool or Die. No two Jobs are alike. The Job is a one of a kind job, not a mass production type
More informationBSCM Sample TEST. CPIM(Certified In Production & Inventory Management) - 1 -
BSCM Sample TEST. 1. Which of the following demand fulfillment approaches typically provides the longest delivery time? A) Engineer-to-order. B) Make-to-order. C) Assemble-to-order. D) Make-to-stock. 2.
More informationPrinciples of Inventory and Materials Management
Principles of Inventory and Materials Management Second Edition Richard J. Tersine The University of Oklahoma m North Holland New York Amsterdam Oxford TECHNISCHE HOCHSCHULE DARMSTADT Fochbereich 1 Gesamthiblio-thek
More informationInventory Management IV: Inventory Management Systems
Inventory Management IV: Inventory Management Systems This module discusses periodic vs. perpetual systems, inventory position, quantity to order, time between orders, target inventory, lead times, reorder
More informationInventory Management. 1
. 1 OVERVIEW Introduction Objectives Opposing Views of Nature of Factors Affecting Costs in Categories - Special Considerations 2013 2 Overview (Cont d) Departments of Functions of Selective Control Reorder
More informationIt is concerned with decisions relating to current assets and current liabilities
It is concerned with decisions relating to current assets and current liabilities Best Buy Co, NA s largest consumer electronics retailer, has performed extremely well over the past decade. Its stock sold
More informationApplication of Game Theory in Inventory Management
Application of Game Theory in Inventory Management Rodrigo Tranamil-Vidal Universidad de Chile, Santiago de Chile, Chile Rodrigo.tranamil@ug.udechile.cl Abstract. Game theory has been successfully applied
More information