we are developing a replenishimment ordering (regular ordering) how to design

how much to order

THEY SHOULD DECIDE HOW MUCH TO BUY AT A TIME

Q Q/2*P*I
ORDER QTY INV CAR COST
100 562.5
300 1687.5
1500 1687.5
1800
2000
3000
6000
12000

HOW MUCH TO BUY AT A TIME

WHEN TO BUY
AT WHAT STOCK LEVEL;
SUGAR LEAD TIME
EVBERYDAY DEMAND

WHAT IS THE ROL (LEAD TIME

CONSUMPTION+SAFETY STOCK)
SAFETY STOCK ?
SO WHAT IS THE VARIATION FROM AVG

ROL

If we do not know the standard deviation then take it as sqrtt(m

equation will be
 DATA REQUIRED VALUE
ANNUAL DEMAND 12000 KG HOTEL BUYING SUGAR
PRICE p 45 KG
ORDERING COST 1500 RS
INV CARRYING COST i% 25%
EOQ SQRT((2*D*O)/(P*I))
533.3333333333

D/Q*O SUMOF INV COST AND ORD COST

ORDERING COST TOTAL
562.5
ROBUSTNESS OF EOQ EQUATION

16 DAYS
33 KG PER DAY

528 LEAD TIME CONSUMPTION

SAFETY STK DEPENDS ON VARIATION FROM AVG CONSUMPTION
STANDARD DEVIATION

NORMINV(SERVICE LEVEL SL, MEAN LEAD TIME SONSUMOPTION , STD DEVIATION)

eviation then take it as sqrtt(mean)

norminv(service l;evel,srrt (mean))
UYING SUGAR

NESS OF EOQ EQUATION

mall example

aim to design a replenishment system for a mall

NO OF ITEMS 15000 INPUTS COMPANY SPECIIFIC

ITEM SPECIFIC DATA

STOCK NUMBER DESCRIPTION DEMAND - D

1 RICE NASMATHI 6000
2 RICE SORTI 12000
3 SUNFLOWER OIL FORTUNE1LTR PACK 4500
4 TIL OIL HRUDAYAM1 LTR 3000
5 PEPSODENT 200 GM WHITE 2400
6
 3 thing s
what is the out put
what is the input
what is the logic to convert input tom output

CODER COST 1500

INV CCG COST 25%
SERVICE LEVEL 0.9

ANNUAL DEMAND
PRICE
LEAD TIME

ANNUAL
DEMAN/365*LEADTI
ME
LEADTIME
PRICE - P LEAD TIME CONSUMPTION ORDER QTY
140 18 295.8904109589
65 15 493.1506849315
95 12 147.9452054795
240 21 172.602739726
65 14 92.0547945205
when to order and order qty(when and how much)
Annual demand,ordering cost,price,inv carry cost,lead time,
servicelevel
EOQ=SQRT((2*DEMAND*ORDERING COST)/(PRICE*I))
ROL-NORMINV(SERVICELEVEL,MN LD TIME CSN,STD DEVN

ROL
 ORDER AT FIXED INTERVALS OF TIME P

MAX LEVEL

SUGAR IN HOTEL

ANNAUL DEMAND D
ORDERING COST O
INV CARRYING COST I
LEAD TIME
SERVICE LEVEL
PRICE
DAILY CONS 32.87
CONSUMPTION DURING PERIOD P 1788.85
CONSUMPTION DURING LEAD TIME 526.027
X(SUMof ABV TWO 2314.877
MAX LWEVEL
 P SYSTEM
NO OF ORDERS IN A YEAR -N= D/EOQ
PERIOD P =365/N

SUM OF
CONS DURING PERIOD P
CONS DURING LEAD TIME
SAFETY STOCK

PERIODIC REPLENISHMENT SYSTEM

12000 EOQ
1500 REVIEW PERIOD
25%
16 DAYS MAX LEVEL
0.9 #NAME?
45

SO ORDER ONCVE IN 54 DAYS

AND ORDER QTY=2376-STOCK ON HAND
SUPPOSE
X=CONS IN PERIOD P+CONS IN LEAD TIME
THE
MAX LEVEL =NORMINV(SL,X,SQRT OF (X))

1788.85
54.48 SO TO BE ORDERED ONCE IN 54 DAYS

2376.5365066394