Economic order quantity, Mechanical Engineering

Assignment Help:

Economic Order Quantity:

Assume an economic order quantity case where annual demand D = 500 units, economic order quantity Q = 100 units, the wanted probability of not stocking out P = 0.95, the standard deviation of demand during lead time σ L = 20 units, and Lead time L = 12 days. Discover the reorder point. Suppose that demand is over a 250 = workday year.

Solution

d' in above example is

 d = 500 /250 = 2   and lead time is 12 days.

 From the equation,

R = d'L + z σL  = 2 (12) + z (20)

Since, in this case z is 1.64. Substituting this value of z, we achieved

R = 2 (12) + 1.64 (20) = 24 + 32.8 = 56.8 units

This illustrated that when the stock on hand gets down to 56 units, order 100 more.


Related Discussions:- Economic order quantity

Lami''s theorems, alternative theorems for lamis theorem

alternative theorems for lamis theorem

Metal cutting, what is tangential force in metal cutting

what is tangential force in metal cutting

Break even analysis, Break even analysis: The costs from Shagun Palace...

Break even analysis: The costs from Shagun Palace, a continental restaurant, are shown below. Fixed costs are Rs. 50,000 per month. Break even analysis is applied as a

What do you mean by shell and tube exchangers, Q. What do you mean by Shell...

Q. What do you mean by Shell and Tube Exchangers? Shell and tube exchanger piping shall be arranged to provide clearance overhead at both bonnet and channel ends. Piping shall

Handling tools and equipment for skid, Q. Handling tools and equipment for ...

Q. Handling tools and equipment for skid? Lifting or pulling and provisions for transportation of skid shall be in accordance with GS-904-0103, other relevant parts of contract

Equilibrium of body - force acted at any angle, Equilibrium of body - force...

Equilibrium of body - force acted at any angle: Magnitude of force ' p ' which is required to move the body down the plane. When ' p ' is acted with an angle of φ.

What is the difference between mis and erp, MIS MIS:- Management Infor...

MIS MIS:- Management Information System Produces reports on user demand MIS is use for the Decision making reports It Collect data form of all department then produce

Estimate elapsed time and height , Phase 1 Initially ALL Valves A, B, C...

Phase 1 Initially ALL Valves A, B, C, D, E and F are closed.  ALL Tanks A, B, C, D, E are separated and each sealed from the atmosphere. Tank E initially has 2' of air @

What is product definition data interface, Product Definition Data Interfa...

Product Definition Data Interface (PDDI) IGES provided a very practical first solution for CAD data exchange, complete with an exchange file format. It was remarkable in the sp

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd