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Inventory Control

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Rowena Cahintong
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22 views

Inventory Control

Uploaded by

Rowena Cahintong
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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THE INVENTORY CYCLE MODEL

FORMULA:
FORMULA:
THE LEAD TIME
EXAMPLE:

On an average day, the company sells 10 flashlights. But during


weekends, they can sell as many as 15. As for lead times, their usual
lead time is 47 days, but during typhoon season it can go up to as high
as 54 days.

TOTAL LEAD TIME = 2 + 5 + 30 + 7 + 3 = 47 days


THE SAFETY STOCK

FORMULA:
1. Safety stock = (max daily sales * max lead time in days) –
(average daily sales * average lead time in days)
2. Reorder point = lead time demand + safety stock
3. Lead time demand = lead time * average daily sales.

SAFETY STOCK = (15 x 54) - (10 x 47) = 340


SERVICE LEVEL:
OTHER MODEL : ROP AT VARIABLE DEMAND AND CONSTANT LEAD TIME:

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