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

Maintenance of bridges - culverts and shoulders, Maintenance of Bridges and...

Maintenance of Bridges and Culverts: Careful inspection of bridges and culverts at periodic intervals can detect cracks, foundation settlement, scour, malfunction of bearings

Find out the safe power transmitted by pulley, Find out the safe power tran...

Find out the safe power transmitted by pulley: A belt drives pulley of 200mm diameter such that ratio of tensions in tight side and slack side is 1.2. If maximum tension in b

Head loss, calculate the head required

calculate the head required

Define oxidation process, Q. Define Oxidation Process? Oxidation is def...

Q. Define Oxidation Process? Oxidation is defined as a loss of electrons, as when a metal goes from the metallic state to the corroded state. When a metal reacts with oxygen,

Calculate days of inventory, Calculate days of inventory: From the dat...

Calculate days of inventory: From the data provided in table 1 and 2, calculate days of inventory. Solution Average Inventory Investment = (Last year inventory + Curre

Rotational to linear, A hinged object hangs on the outside of a rotating wh...

A hinged object hangs on the outside of a rotating wheel. When the object is in the six o''clock position, it needs to be rotated 180 degrees using only the rotational power of the

Array, sorting order of arra

sorting order of arra

Governors, How a governor works? I mean how it''s regulate the speed of for...

How a governor works? I mean how it''s regulate the speed of for example electricity generators?

Explain the procedure of rockwell hardness tests, Q. Explain the procedure ...

Q. Explain the procedure of Rockwell hardness tests? Rockwell hardness tests per ASTM of the deposited weld, and heat affected zone shall be required for procedure qualificatio

Physics, what is the advantage of fan

what is the advantage of fan

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