3 Inventory Management POQ Example D 2000 units p 12 units per day S 5 d 6 units per day H 100 per unit per year Determine the optimal number of items to produce Determine the expected number of...

TimsTabletCo (TTC) produces tablet computers and it must determine the number of units to be produced during each of the next four monthe The following table gives the monthly demand and the monthly cost of producing each unit lrrrr Month 1 2 3 4 Demand (in units) 5000 2000 6000 1000 Production Cost (dollars per unit) 400 600 200 300 At the start before Month 1 TC has an inventory of 2000 units Each month up to 4000 units can be produced TTC can use the units produced in a particular month in two ways either use some units to satisfy the demand in the same month or store some units in inventory for future use The cost of storing units in inventory is 100 per unit per month(a) Formulate an LP problem (P) to minimize the total cost of meeting the demands of the next four months

Type 1 Capacity and Utilization - Problem A factory produces 1200 widgets per 8-hour shift If the factory operates two shifts per day 5 days a week what is its weekly production capacity - Problem A machine has a theoretical capacity of 50 units per hour Currently it achieves an 85 utilization rate What is the machines effective capacity per hour Type 2 Inventory Management - Problem A company has an annual demand of 50000 units for a product Their ordering cost is 100 per order and the holding cost is 2 per unit per year What is the Economic Order Quantity (EOQ) - Problem A retailer observes average daily demand for a product is 20 units with a lead time of 5 days If they want to maintain a safety stock of 10 units what is their reorder point Type 3 Production and Labor Costs - Problem A product requires 05 hours of labor per unit Workers are paid 18 per hour Material costs are 7 per unit What is the total cost to produce 100 units of this product - Problem A process can produce 80 units per hour If the overhead cost allocated to this process is 50 per hour what is the overhead cost per unit Type 4 Forecasting - Problem Sales over the past 5 months were 120145130150140 Using a 3-month moving average what is the forecast for the next month - Problem Using the data from the previous problem calculate the forecast for the next month using exponential smoothing with an alpha (a) of 03 (Assume the last months actual sales was the initial forecast)

2 An item is consumed at the rate of 30 items per day The holding cost per unit per day is 805 and the setup cost is 100 Suppose that no shortage is allowed and that the purchasing cost per unit is 10 for any quantity not exceeding 500 units and 8 otherwise The lead time is 21 days Determine the optimal inventory policy

Use the graph above to answer the following questions - What is the best interpretation for point a - What is the best interpretation for point b Select two answers from the list below to answer the questions Point b When producing 15 units per day it costs 25 per unit to produce 15 units Point b When producing 15 units per day it costs 25 to produce just the 15th unit Point b When producing 15 units per day it costs 25 total to produce all of those 15 units Point a When producing 15 units per day it costs 100 total to produce all of those 15 units Point a When producing 15 units per day it costs 100 to produce the 15th unit Point a When producing 15 units per day it costs 100 per unit to produce those 15 units