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Ops Final Cheat Sheet.docx

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Allan Marshall

Retailer The Quantity that yields the lowest total cost is optimum A bill of material BOM is a listing of all of the Chapter 11 RevenuepriceQReorder PointExpected demandSafety Stock subassemblies parts and raw material that are needed to Selecting transportation mode CostSelling PriceQ RPriceQ ROPduring lead time produce one unit of a finished product Thus eachManufacturer Service LevelProbability that demand will not exceed finished product has its own bill of materialrevenueselling priceQRPriceQsupplyHannual holding cost of items being transported CostFixedVariableQ Lead time service level probability that demand will not Inventory Requirementsdduration of transport in daysexceed supply during lead timeNet requirementsGross Requirements Quantity Q Demand D Annual service level percentage of annual demandAvailable Inventory retailer filledAvailable InventoryProjected on hand Win Win Contracts RevenuePrice DSalvage Value QD Safety stockInventory allocated to other itemsSingle Period model Quantity QDemandDCostSelling Price Q Rprice D MRP Processing Safety stockzdLT RevenuepriceQ Manufacturer net requirements Gross requirements in period tzsafety factor number of standard deviations aboveCostCostQ Revenueselling PriceQ Rprice D projected inventory at start of period tscheduled expected demand CostFixedVariableQreceiptssafety stock the standard deviation of demand during lead time dLTQuantity Q Demand D Partperiod method refers to holding a part or parts over RManufacturers portion from retailer in revenue RevenuePrice DSalvage valueQD a number of periodssharing scheme variable demand during a lead timeCostCostQ ROPexpected demand during lead timesafety stockChapter 12 Economic Order QuantityROPz dLT Sorder cost ordervariable demand and constant lead timeCapacity Requirements Planning CRPHcarrying cost itemyearROPaverage demand x lead timezst dev of Process of determining shortrange capacity Cothe cost of overestimating demandDdemand unitsyear demand during lead time requirements Cuthe cost of underestimating demand is the loss of Qorder quantity demand and lead time measures in same time units profit not earned Nnumber of orders per yearTime requirementsIaverage inventory where pprobability demandQavgquantity requirementsstandard time Area under probability distribution curve is 100 per unitsetup time per run Relevant costordering costcarrying cost Identify the vertical line that splits the area into two both demand and lead time are variableparts with areasTC SNHIavg Chapter 15 ROP avg demandavg lead timezst dev ofTCQ SDQHQ2 Pull Systemdemand in lead time A workcenter may produc
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