ISDS 3115 Lecture : LT 2 Notes From Class
15 Mar 2019
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Demand for products that need to be produced. Ex: 20 batches of 100 means that we have enough on hand to satisfy twenty orders/jobs. It is easier to calculate in jabs (1 job = 100 kits) then to calculate in kits. Tracking signal will show whenever we expect that there is a jump in demand. It is important to show we can calculate standard deviation, average, and tracking signal. When we get to our reorder point, the system places an order. How much this order is for depends on what the reorder quantity we have set is. Outstanding orders we have placed the order, the order has started to ship, but the order has not yet arrived. We don"t ever want to have 0 inventory. Be sure to convert to appropriate time units. H=10% of the value that we have in inventory b/c there is a 10% interest rate on the money that we are holding.
