Production and Operation Managements Inventory Control Subject to Known Demand Prof.JIANG Zhibin Dr.GENG Na Department of Industrial Engineering Management Shanghai Jiao Tong University
Production and Operation Managements Prof. JIANG Zhibin Dr. GENG Na Department of Industrial Engineering & Management Shanghai Jiao Tong University Inventory Control Subject to Known Demand
Contents .Types of Inventories .Motivation for Holding Inventories; .Characteristics of Inventory System; .Relevant Costs; .The EOO Model: .EOQ Model with Finite Production Rate Quantity Discount Models .Resource-constrained multiple product system .EOQ models for production planning Power-of-two policies
Contents •Types of Inventories •Motivation for Holding Inventories; •Characteristics of Inventory System; •Relevant Costs; •The EOQ Model; •EOQ Model with Finite Production Rate •Quantity Discount Models •Resource-constrained multiple product system •EOQ models for production planning •Power-of-two policies
Introduction .Inventory is the stock of any item or resource used in an organization. .An inventory system is the set of policies and controls that monitors levels of inventory or determines what levels should be maintained. "Generally,inventory is being acquired or produced to meet the need of customers; .Dependant demand system-the demand of components, subassemblies,and assemblies are intersected (lower levels depend on higher level)-MRP(Material Requirement Planning)system;
Introduction •Inventory is the stock of any item or resource used in an organization. •An inventory system is the set of policies and controls that monitors levels of inventory or determines what levels should be maintained. •Generally , inventory is being acquired or produced to meet the need of customers; •Dependant demand system-the demand of components, subassemblies, and assemblies are intersected (lower levels depend on higher level)-MRP ( Material Requirement Planning) system;
Introduction The fundamental problem of inventory management -When to place order for replenish the stock -How much to order? The complexity of the resulting model depends on the assumptions about the various parameters of the system The major distinction is between models for known demand and random demand
Introduction • The fundamental problem of inventory management : When to place order for replenish the stock ? How much to order? • The complexity of the resulting model depends on the assumptions about the various parameters of the system The major distinction is between models for known demand and random demand
Introduction .The current investment in inventories in USA is enormous; .It amounted up to $1.57 trillion in the third quarter of 2007; It accounts for 20-25%of the total annual GNP(general net product); .There exists enormous potential for improving the efficiency of economy by scientifically controlling inventories; Farm 11粉 7对 Inventory model $174.6 s1146 billion billion discussed here are most Retail 30% Monufocturing Fig.4-1 (29周 applicable to $472.5 Breakdown of boa 3454.9 billion the Total manufacturing, Wholesale Investment in 239 wholesale,and retail Inventories 353.6 billion in the U.S sectors,composing 82 Economy (2007) Total investment-$1,570.2 billion of the total Survey of Current Business Uuly 2007)
Introduction •The current investment in inventories in USA is enormous; •It amounted up to $1.57 trillion in the third quarter of 2007; •It accounts for 20-25% of the total annual GNP (general net product); •There exists enormous potential for improving the efficiency of economy by scientifically controlling inventories; Fig. 4-1 Breakdown of the Total Investment in Inventories in the U.S. Economy (2007) Inventory model discussed here are most applicable to manufacturing, wholesale, and retail sectors, composing 82 % of the total