33:136:386 Lecture Notes - Lecture 6: Lead Time, Fixed Cost, Spreadsheet
15 Mar 2016
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Document Summary
Involves determining the opimal quanity to purchase when orders are placed: small orders result in: Frequent orders and higher ordering costs: large orders result in: Costs: set-up costs (also called ordering cost) Fixed cost each ime an order is placed. Doesn"t depend on order size: holding costs. Includes inancial and noninancial costs: unit purchasing cost, unit selling price. Eoq spreadsheet model: enter all inputs, which include, cost/revenue data, annual demand c. Lead ime: enter any trial value of an order quanity, we will eventually ind the opimal value with the solver, calculate costs afected by the order quanity a. Includes setup and holding costs: calculate monetary values unafected by the order quanity a. Includes purchase cost and revenue: calculate costs, use the solver to minimize afected costs, changing cell is order quanity, constraints are that order quanity is nonnegaive and (if desired) is an integer.
