supply chain assignment 6290
Question1:
Consider the continuous review policy (Q, R). Explain why the expected level of inventory before receiving the order is : ?× ??? ×√? while the expected level of inventory immediately after receiving the order is: ? +?×??? × √?
Answer 1:
According to the continuous review policy, the inventory is continuously reviewed and an order is placed when the inventory level reaches the Reorder level R which is equal to the daily average demand times the lead time plus the safety stock: AGV x L + ?× ??? ×√?, during the lead time only the quantity AVG x L is used, and if the order is received exactly at the end of the lead time L, the expected level inventory after receiving the order is the new order quantity Q plus the safety stock ?× ??? ×√?
Consider the base-stock in periodic review. Explain why the expected level of inventory after receiving an order is equal to ? ×??? +? ×??? × √? +? while the expected level of inventory before an order arrives is ?× ??? ×√? + ? .
According the periodic review policy, the inventory level is reviewed at a regular basis and an order is placed right after the review to reach the Base-stock level, the daily average demand during the period r, which is the period between 2 consecutive reviews, is ? ×???, and from the order point until the next receiving the daily average demand is L ×???, thus, the safety stock which represent a buffer during the lead time is ? ×??? × √? +? ( the time cycle is L+r). Consequently At the end of the lead time and before the reception of the order the inventory level equals to the safety stock ? ×??? × √(? +?).After the order arrives, the expected inventory level which is supposed to cover the demand during the review period r reaches again the based stock level minus the daily average used during the lead time, which is ( L+?) ×??? +? ×??? × √(? +?)-L.AVG= ? ×??? +? ×??? × √? +?
3-Imagine that you operate a department store. List five products you sell, and order them from lowest
Consider the continuous review policy (Q, R). Explain why the expected level of inventory before receiving the order is : ?× ??? ×√? while the expected level of inventory immediately after receiving the order is: ? +?×??? × √?
Answer 1:
According to the continuous review policy, the inventory is continuously reviewed and an order is placed when the inventory level reaches the Reorder level R which is equal to the daily average demand times the lead time plus the safety stock: AGV x L + ?× ??? ×√?, during the lead time only the quantity AVG x L is used, and if the order is received exactly at the end of the lead time L, the expected level inventory after receiving the order is the new order quantity Q plus the safety stock ?× ??? ×√?
Consider the base-stock in periodic review. Explain why the expected level of inventory after receiving an order is equal to ? ×??? +? ×??? × √? +? while the expected level of inventory before an order arrives is ?× ??? ×√? + ? .
According the periodic review policy, the inventory level is reviewed at a regular basis and an order is placed right after the review to reach the Base-stock level, the daily average demand during the period r, which is the period between 2 consecutive reviews, is ? ×???, and from the order point until the next receiving the daily average demand is L ×???, thus, the safety stock which represent a buffer during the lead time is ? ×??? × √? +? ( the time cycle is L+r). Consequently At the end of the lead time and before the reception of the order the inventory level equals to the safety stock ? ×??? × √(? +?).After the order arrives, the expected inventory level which is supposed to cover the demand during the review period r reaches again the based stock level minus the daily average used during the lead time, which is ( L+?) ×??? +? ×??? × √(? +?)-L.AVG= ? ×??? +? ×??? × √? +?
3-Imagine that you operate a department store. List five products you sell, and order them from lowest