OPER 2P91 Lecture 1: Chapter 12

• School: Brock University
• Department: Operations Management
• Course: OPER 2P91
• Professor: dr.

Document Summary

How do we do abc analysis: annual volume x unit costs = total cost for the particular unit, add all the units cost together of all totalcosts of units, each unit is then divided by total unit cost = Each unit cost: we get a percentage which we add to make each categories, add all the greater % in order too get close to 80 % that gives you class a do the same for class b and c, you group them accordingly in order to analysis properly. Annual holding cost=(avg. inv . level) x(holding cost perunit ) (setup order cost) (s) ; expected time betweenorder=t = num of workingdays per year. Q ( s) ; annual holding cost=( imax. 2 (h )both side are supposed equal same amount close you add both get tc. ;max inv level( imax )=epq(1 d p);day selling only period last= imax d. P is production rate ;t 2= imax d.