Economic order quantity, Mechanical Engineering

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.


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.

Posted Date: 2/1/2013 6:48:14 AM | Location : United States

Related Discussions:- Economic order quantity, Assignment Help, Ask Question on Economic order quantity, Get Answer, Expert's Help, Economic order quantity Discussions

Write discussion on Economic order quantity
Your posts are moderated
Related Questions
Cam This is a mechanical member that imparts motion to another member called follower. Illustration: A cam is rotating at regular speed of 1200 rpm in the clockwise d

(a) Prove that the fourier series expansion for the function x(t) described in the finite interval -π ≤ t≤ π x(t) = 0 -π ≤ t ≤ 0 x(t) = sint 0 ≤ t ≤ π (b) Represent t

Find out the moment of inertia of an annular area: Find out the M. I. of an annular area among two circles where difference of radius is quite small, around any centroidal axi


design a car to be build by balsa wood trusses, the car has to be with in a specific dimension, calculations of forces on members and nodes using method of joints need to be done a

Q. Explain about Surface Preparation? All oil, grease, salts, and any other contaminants detrimental to the formation of a good coating bond or coating quality must be removed

Q. Postweld heat treatment? When the equipment data sheet specifies post-weld heat treatment either for service conditions or code requirements, welding, hammering (peening), o

Copper-Nickel Alloys Complete solubility arises between nickel and copper. All alloys have same microstructure and may be cold or hot worked. Cupro-nickel also termed as Ge
