BU395 Final: Ops Final Cheat Sheet.docx
Document Summary
H = annual holding cost of items being transported d = duration of transport (in days) The order quantity corresponding to the vertical line is optimal. Revenue = price *d + salvage value * (q-d) Revenue = price * q revenue = selling price * q. Cost = selling price * q c = fixed + variable*q. Revenue = price *d + buyback * (q-d) Revenue = selling price * q + salvage * (q-d) Cost = fixed + variable * q + buyback *(q-d) The quantity that yields the lowest total cost is optimum. Reorder point = expected demand + safety stock. Cost = selling price * q+ r * price * q (rop) during lead time. Service level - probability that demand will not exceed. Manufacturer revenue = selling price * q + r * price * q supply. Lead time service level: probability that demand will not exceed supply during lead time.
