SCM 402 Study Guide - Midterm Guide: Master Production Schedule, Stockout, Material Requirements Planning
Document Summary
Available time=# of machines x hours per day x # of days. Utilization= (hours actually worked)/ (available hours) x 100. Efficiency= (standard hours produced/ hours actually worked) x 100. Annual ordering costs = number of orders x cost per order. Annual carrying costs = average inventory x unit costs x carrying costs. Total annual costs = annual ordering costs + annual carrying costs. As the order quantity increases the average inventory and the annual cost of carry inventory increases but the number of order per year and the order cost decreases. Eoq will increase as the annual demand and the cost of ordering increase, and it will decrease as the cost of carrying inventory and unit cost increase. Period order quantity calculates the number of periods that are to be covered. Capacity planning resources required to meet the priority plan and the methods needed to make that capacity available.