CH13Types-of-Inventory(运营管理-英文版).ppt

Types of InventoryTransit stock or pipeline inventoryCycle stockSafety stock(buffer inventory)Anticipation inventoryOthersSmoothing inventoriesHedge inventories12006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldFour Inventory Drivers1.Demand and Capacity MismatchesSmoothing inventories2.Demand and Process Volume MismatchesCycle stocks3.Demand and Supply UncertaintiesSafety stocks4.Demand and Process Lead-Time MismatchesAnticipation inventories 22006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldIndependent DemandDemand from outside the organizationUnpredictable usually forecastedDemand for tables.32006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldDependent DemandTied to the production of another itemRelevant mostly to manufacturersOnce we decide how many tables we want tomake,how many legs do we need?42006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldTwo“Classic”Systems for Independent Demand ItemsPeriodic review systemsContinuous(perpetual)review systemsFixed order quantity(Q)Reorder pointR)52006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldPeriodic Review System(Orders at regular intervals)InventorylevelTime24662006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldContinuous Review System(Orders when inventory drops to R)L-TQRHow is the reorder point R established?InventorylevelTimelead time to get a new order in72006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldComparison of Periodic and Continuous Review SystemsPeriodic ReviewFixed order intervalsVariable order sizesConvenient to administerOrders may be combinedInventory position only required at reviewContinuous ReviewVarying order intervalsFixed order sizes(Q)Allows individual review frequenciesPossible quantity discountsLower,less-expensive safety stocks82006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldOrder Quantity Q and Average Inventory LevelAs the order quantity doublesso does the average inventory(=Q/2)Q1Q2Q22Q1292006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldWhat is the“Best”Order Size Q?Determined by:Inventory related costsOrder preparation costs and setup costsInventory carrying costsShortage and customer service costsOther considerationsOut of pocket or opportunity cost?Fixed,variable,or some mix of the two?102006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldEconomic Order Quantity(EOQ)ModelCost Minimizing“Q”Assumptions:Uniform and known usage rateFixed item costFixed ordering costConstant lead time112006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldWhat are the Total Relevant Annual Inventory Costs?Consider:D=Total demand for the yearS=Cost to place a single orderH=Cost to hold one unit in inventory for a yearQ=Order quantityThen:Total Cost =Annual Holding Cost +Annual Ordering Cost=(Q/2)H+(D/Q)S How do these costs vary as Q varies?Why isnt item cost for the year included?122006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldHolding Cost$QHolding cost increasesas Q increases.(Q/2)H132006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldOrdering Costs$QOrdering costs per yeardecrease as Q increases(why?)(Q/2)H(D/Q)S142006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldTotal Annual Costs and EOQEOQ at minimum total cost152006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldEOQ SolutionWhen the order quantity=EOQ,the holding and setup costs are the same162006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldSample ProblemsPam runs a mail-order business for gym equipment.Annual demand for the TricoFlexers is 16,000.The annual holding cost per unit is$2.50 and the cost to place an order is$50.What is the economic order quantity?Using the same holding and ordering costs as above,suppose demand for TricoFlexers doubles to 32,000.Does the EOQ also double?Explain what happens.172006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldEOQ tells us how much to order.but when should we order?Reorder point and safety stock analysisChapter 10,Slide 182006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldSafety Stock When both lead time and demand are constant,you know exactly when your reorder point is.QLR192006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldSafety Stock II Under these assumptions:Reorder point=total demand during the lead time between placement of the order and its receipt.ROP=d L,whered=demand per unit time,andL=lead time in the same time units 202006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldSafety Stock III(Uncertainties)But what happens when either demand or lead time varies?QL1RL2212006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldSafety Stock IVWhat causesthis variance?Average demandduring lead time222006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldSafety Stock VAdditional inventory beyond amount needed to meet“average”demand during lead timeProtects against uncertainties in demand or lead timeBalances the costs of stocking out against the cost of holding extra inventory232006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldShown Graphically Now,what is thechance of a stockout?93%7%242006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldRecalculating the Reorder Point to include Safety Stock252006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldDetermining“z”Iz =number of standard deviations above the average demand during lead timeThe higher z is:The lower the risk of stocking outThe higher the average inventory levelWhat is the average inventory level when we include safety stock?262006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldDetermining“z”IITypical choices for z:z=1.29 90%service levelz=1.65 95%service levelz=2.33 99%service levelWhat do we mean by“service level”?272006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldReorder Point Formula:What happens if lead time is constant?What happens if the demand rate is constant?What happens if both are constant?If you wanted to reduce the amount of safety stock you hold,what is your best option?282006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldProblems IOne of the products stocked by Sams Club is SamsCola.During the slow season,the demand rate is approximately 650 cases a month,which is the same as a yearly demand rate of 65012=7,800 cases.During the busy season,the demand rate is approximately 1,300 cases a month,or 15,600 cases a year.The cost to place an order is$5,and the yearly holding cost for a case of SamsCola is$12.292006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldProblems IIAccording to the EOQ formula:qHow many cases of SamsCola should be ordered at a time during the slow season?qHow many cases of SamsCola should be ordered during the busy season?302006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldProblems IIIDuring the busy season,the store manager has decided that 98 percent of the time,he does not want to run out of SamsCola before the next order arrives.Use the following data to calculate the reorder point for SamsCola.Weekly demand during the busy season:325 cases per weekLead-time:0.5 weeksStandard deviation of weekly demand:5.25Standard deviation of lead-time:0(lead-time is constant)Number of standard deviations above themean needed to provide a 98%service level(z):2.05 312006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldVolume Discounts IWhat effect will volume discounts have on the EOQ?D =1,200 units(10012 months)K =12%of unit costS =$8.00 ordering costOrder SizePrice0-74$35.0075 and up$32.50322006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldVolume Discounts II1.Calculate the EOQ for the lowest price:2.If we can order this quantity AND get the lowest price,were done.Otherwise.332006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldVolume Discounts III3.Calculate EOQ at the next lowest price,and keep repeating until you find an EOQ that is“feasible”:We could order 68 at$35.00 each342006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldVolume Discounts IV4.Compare total holding,carrying AND item cost for the year at:Each price break The first feasible EOQ quantityDo you understand why we must now look at item cost for the year?352006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldVolume Discounts VTotal costs at an order quantity of 75:(75/2)(12%)$32.50+(1200/75)$8.00+1200$32.50=$146.25+$128.00 +$39,000 =?Total costs at an order quantity of 68:(68/2)(12%)$35.00+(1200/68)$8.00+1200$35.00=$142.80+$141.18 +$42,000 =?362006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldConclusions:When all costs are considered,it is cheaper to order 75 at a time and take the price discount.When there are volume discounts,the EOQ calculation might be infeasible or might not result in lowest total cost.Hence,more detailed analysis is required.372006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldABC Classification MethodIDEACompanies have thousands of items to trackMethods like EOQ only justifiable for most important items.382006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldABC Method1.Determine annual$usage for each item2.Rank the items according to their annual$usage3.Let:Top 20%“A”items roughly 80%of total$Middle 30%“B”items roughly 15%of total$Bottom“50%“C”item roughly 5%of total$392006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldABC Analysis ExampleTotal$Usage=$98,500ItemCostDemand$UsageA1$46200$9,200B2$4010$400C3$56680$33,400D4$81100$8,100E5$2250$1,100F6$6100$600G7$176250$44,000H8$6150$900I9$1010$100J10$1450$700402006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&HandfieldRanking by Annual$UsageItem$UsageCumulative$Usage%of Total$UsageClassG7$44,000$44,00044.67%AC3$33,400$77,40078.58%AA1$9,200$86,60087.92%BD4$8,100$94,70096.14%BE5$1,100$95,80097.26%BH8$900$96,70098.17%CJ10$700$97,40098.88%CF6$600$98,00099.49%CB2$400$98,40099.90%CI9$100$98,500100.00%C412006 Pearson Prentice Hall Introduction to Operations and Supply Chain Management Bozarth&Handfield