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

Cost of processing the payroll, The processing of payroll for the 10,000 wo...

The processing of payroll for the 10,000 workers in a large rm can either be done using 1 hour of computer time (signed by K) and no clerks or with 10 hours of clerical time (sign

Find out the deflection - vertical, Find out the deflection: Find out ...

Find out the deflection: Find out the deflection (vertical) at a distance 'a' from the tip in Example Solution As in this case there is no load at the point where the

Inventor claims in adiabatic system - mechanics, Inventor claims in adiabat...

Inventor claims in adiabatic system: On e inventor claims that 2 kg of air supplied to magic tube at 4 bar and 20°C and the two equal mass streams at 1 bar are produced, one

Stress, Difference between direct and shear stress

Difference between direct and shear stress

Free body diagram - mechanics, Free body diagram: Sol.: In a free bod...

Free body diagram: Sol.: In a free body diagram, the body is considered by itself and also the effect of the surroundings on the body is shown by forces and moments. Free bod

Calculate a quarterly delivery schedule, Gibson Ltd operates sportswear sto...

Gibson Ltd operates sportswear stores in Dublin and Cork and has set the following quarterly sales target for international and provlncial rugby shirts for 2013 per the attached sc

Explain the standard for exchange and transfer, Standard for Exchange and T...

Standard for Exchange and Transfer (SET) The interface SET is a standard for the exchange of all data which is generated for CAD/CAM. It is a French development and was first p

Acceleration of the two blocks, In the drawing, the weight of the block on ...

In the drawing, the weight of the block on the table is 380 N and that of the hanging block is 215 N. Ignore all frictional effects, and assuming the pulley to be massless.

What are the advantages of gear drive, In general, gear drive is useful for...

In general, gear drive is useful for power transmission among two shafts, which are near to each other (at most at 1m distance). In addition, it has maximum efficiency whereas tran

Uses of carnot cycle - thermodynamics, Use s of Carnot Cycle: 1. It ...

Use s of Carnot Cycle: 1. It helping us to appreciate what factors is desirable in the design of practical cycle; namely a maximum possible temperature range. 1 maximum p

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