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01:15 am to 04:15 pm
Dr. Anannya Deb Dr. Anannya Deb Roy
01:15 am to 4:15 am 03-20-12
Operations Research
Midterm ( Jan-June-2012) Implication of Operations Research Linear Programming Transportation Model Assignment Model Traveling Salesman Problem
Dr. Anannya Deb Roy MFM,NIFT,Kolkata
01:15 am to 04:15 pm 03-20-12
Dr. Anannya Deb Roy Dr. Anannya Deb MFM ,NIFT ,Kolkata
Roy MFM, NIFT, Kolkata
01:15 am to 4:15 am 03-20-12
Operations Research
End term ( Jan-June-2012) Inventory Management Simulation Queuing Theory Project Management
01:15 am to 04:15 pm 03-20-12
Dr. Anannya Deb Roy MFM, NIFT, Kolkata
01:15 am to 4:15 am 03-20-12
Inventory Models
Necessity
for Maintaining Inventory Cause of Pour Inventory Control Classification of Inventories
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Classification of Inventories
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Direct
Inventories Indirect Inventories

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Direct Inventories
Production
Inventory Work-in-Process Inventory Finished Goods Inventory Maintenance Repair and Operating (MRO) Inventory Miscellaneous Inventory
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Indirect Inventories
Transit
or Pipeline Inventory Buffer Inventory Decoupling Inventory Seasonal Inventory Lot Size Inventory Anticipation Inventory

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Inventory Cost
Purchase
Costs Inventory Carrying or Stock Holding Costs Procurement Costs Shortage Costs
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Purchase Cost
Price
Item
that is paid for the Purchasing/Producing an
May May
be Constant/Per Unit Vary with the Quantity Purchase/Produced
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Inventory Carrying Costs/Stock Holding Costs

Cost
of Money or Capital Tied Up in Inventories (15% to 20%) Cost of Storage Space, Includes Heating, Lighting and Other Atmospheric Control Expenses (1 % to 3%) Depreciation or Deterioration Costs( 0.2% to 1%)
01:15 am to 4:15 am 03-20-12 Dr. Anannya Deb Roy MFM,NIFT,Kolkata
01:15 am to 04:15 pm 03-20-12
01:15 am to 4:15 am 03-20-12
Inventory Carrying Costs/Stock Holding Costs (Continue)

Pilferage
Costs ( 1%) Obsolescence Costs (5 %) Handling Costs Record Keeping Costs Taxes and Insurance ( 1% to 2%)

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Expression of Inventory Carrying Cost

As
Percent/Per Unit Time (20% Per Year) Monetary Value/Unit/Per Unit Time ( RS. 10/Unit/Year)
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Procurement Costs or Set Up Costs or Order Cost

Costs for Placing an Order or Setting up a Machinery : Purchase Requisition Follow up Receiving the Goods Quality Control Cost of Mailing, Telephone Calls
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Shortage Costs or Stock-Out Costs

Costs Associated : Delay in Meeting a Demand Inability to Meet the Demand
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01:15 am to 4:15 am 03-20-12
Inventory Control Problem
When
to Order ? How Much to Order ? How Much Safety Stock Should be Kept ?
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01:15 am to 4:15 am 03-20-12
When to Order ?
Lead
Time: Time Interval between Placing an Order and Receiving it in Stock Reorder Level Minimum Stock which can meet the Demand before replenishment
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The Economic Order Quantity Model

Assumptions:
1. Production is instantaneous. There is no capacity constraint and the entire lot is produced simultaneously. Delivery is immediate. There is no time lag between production and availability to satisfy demand. Demand is deterministic. There is no uncertainty about the quantity or timing of demand.
2.
3.
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The Economic Order Quantity Model

Assumptions:
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4.
Demand is constant over time. In fact, it can be represented as a straight line, so that if annual demand is 365 units this translates into a daily demand of one unit.
A production run incurs a constant setup cost. Regardless of the size of the lot or the status of the factory, the setup cost is the same.
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Economic Order Quantity (EOQ) Model
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2 R C2 EOQ = C1
R = Demand per Unit Time C2 =Cost per Order per Unit C1 = Holding cost per Unit
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09:15 am to 10:45 am 03-19-12
EOQ:Problem:1
Dinesh has to supply 12,000 units of a product per year to his customers. The demand is fixed and known and the shortage cost is assumed to be infinite. The inventory holding cost is Rs. 0.20 per unit per month and the ordering cost per order is Rs. 350. Determine 1) The optimum lot size 2) Optimum scheduling period 3) Minimum total average cost per year
01:15 am to 04:15 pm 03-20-12 Dr. Anannya Deb Roy MFM, NIFT, Kolkata
09:15 am to 10:45 am 03-19-12
EOQ:Problem:2
Vanya has forecasted demand for a particular item as 9,000 units/year. The cost of one procurement is Rs.100 and the holding cost per unit is Rs. 2.40 per year. The replacement is instantaneous and no shortage are allowed. Determine: 1) The economic lot size 2) The no. of order per year 3) The time between orders 4) The total cost per year if the cost of one unit is Rs. 1
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09:15 am to 10:45 am 03-19-12
EOQ:Problem:3
Nimisha has to supply 400 units of a product every Monday to the customers of her organization. She gets the product at Rs. 50 per unit from the manufacturer. The cost of ordering and transportation from the manufacturer is Rs. 75 per order. The cost of carrying inventory is 7.5% per year of the cost of the product. Find: 1) The economic lot size 2) The total optimal cost 3) The total weekly profit if the item is sold for Rs. 55 per unit
01:15 am to 04:15 pm 03-20-12 Dr. Anannya Deb Roy MFM, NIFT, Kolkata
09:15 am to 10:45 am 03-19-12
EOQ:Problem:3
Mahua has predicted that the demand for a commodity is 100 units per day. Every time an order is placed, a fixed cost of RS. 400 is incurred. Holding cost is Rs. 0.80 per unit per day. If the lead time is 13 days, determine the economic lot size and the reorder point
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01:15 am to 4:15 am 03-20-12
Classifying Inventory Items

ABC Classification (Pareto Principle) A Items: very tight control, complete and accurate records, frequent review B Items: less tightly controlled, good records, regular review C Items: simplest controls possible, minimal records, large inventories, periodic review and reorder
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VED Analysis
V-Ital
items Items Items
E-essential
D-Desirable
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FNSD Analysis
F-Fast
Moving Items Moving Items
N-Normal S-Slow
Moving Items Items
D-Dead
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Reference
Gupta,
Prem Kumar and D.S. Hira, (2010), Operations Research, S. Chand, New Delhi, India
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Dr. Anannya Deb Dr. Anannya Deb Roy

01:15 am to 4:15 am 03-20-12

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Roy MFM, NIFT, Kolkata

01:15 am to 4:15 am 03-20-12

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

01:15 am to 4:15 am 03-20-12

for Maintaining Inventory Cause of Pour Inventory Control Classification of Inventories

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

01:15 am to 4:15 am 03-20-12

Inventories Indirect Inventories

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

01:15 am to 4:15 am 03-20-12

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

01:15 am to 4:15 am 03-20-12

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

01:15 am to 4:15 am 03-20-12

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

01:15 am to 4:15 am 03-20-12

that is paid for the Purchasing/Producing an

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

be Constant/Per Unit Vary with the Quantity Purchase/Produced

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

Inventory Carrying Costs/Stock Holding Costs

01:15 am to 4:15 am 03-20-12 Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

01:15 am to 4:15 am 03-20-12

Inventory Carrying Costs/Stock Holding Costs (Continue)

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

01:15 am to 4:15 am 03-20-12

Expression of Inventory Carrying Cost

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

Procurement Costs or Set Up Costs or Order Cost

01:15 am to 4:15 am 03-20-12 Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

Shortage Costs or Stock-Out Costs

01:15 am to 4:15 am 03-20-12 Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12

Dr. Anannya Deb Roy MFM, NIFT, Kolkata

01:15 am to 4:15 am 03-20-12

Inventory Control Problem

Dr. Anannya Deb Roy MFM,NIFT,Kolkata

01:15 am to 04:15 pm 03-20-12