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review 2320
2/11/2014-3230

Independent demand
Dependent demand

Finished Goods inventories—retailers
WIP inventories—Assemble to order
Raw materials inventory—Make to stock, Make to order

Cycle inventory—Q/2
Safety Stock inventory—SS*D
Pipeline Inventory—L*D

Cost of inventory
1. Shipment
2. Unit cost
3. Ordering Cost
4. Holding Cost
5. Shortage cost
6. Obsolescence(荒废)
What are the benefits of low inventory? ---Low holding cost (Q/2)

A. Office Supplies—Large inventories
B. Flu shots—Large inventories

ABC Analysis

Less inventory for A (most expensive items), Large inventories for C (lowest cost items)
EOQ
Holding cost: (Q/2)*h
Ordering cost: (D/Q)*S

EOQ=intersection point of Holding and Ordering cost
Total Cost=(D/Q)*S+(Q/2)*H+ Safety Stock*H+D*S
Q=square root of (2DS)/H
2/11/2014-3230

Independent demand
Dependent demand

Finished Goods inventories—retailers 2/11/2014-3230

Independent demand
Dependent demand

Finished Goods inventories—retailers
WIP inventories—Assemble to order
Raw materials inventory—Make to stock, Make to order

Cycle inventory—Q/2
Safety Stock inventory—SS*D
Pipeline Inventory—L*D

Cost of inventory
7. Shipment
8. Unit cost
9. Ordering Cost
10. Holding Cost
11. Shortage cost
12. Obsolescence(荒废)
What are the benefits of low inventory? ---Low holding cost (Q/2)

C. Office Supplies—Large inventories
D. Flu shots—Large inventories

ABC Analysis

Less inventory for A (most expensive items), Large inventories for C (lowest cost items)
EOQ
Holding cost: (Q/2)*h
Ordering cost: (D/Q)*S

EOQ=intersection point of Holding and Ordering cost
Total Cost=(D/Q)*S+(Q/2)*H+ Safety Stock*H+D*S
Q=square root of (2DS)/H
2/11/2014-3230

Independent demand
Dependent demand

Finished Goods inventories—retailers
WIP inventories—Assemble to order
Raw materials inventory—Make to stock, Make to order

Cycle inventory—Q/2
Safety Stock inventory—SS*D
Pipeline Inventory—L*D

Cost of

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