Basic Inventory Models (EOQ) Examples
 

On the basis of the theory developed here some of the examples of the basic inventory models are given below for easy understanding of the concept as well as to enable one solve the day to day Inventory problems too as far as determining the Economic Order Quantities , Time for ordering etc,.are concerned
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 


The Classical Model

Demand rate: x

Ordering cost: C1

Holding cost: C2

Optimal Ordering Is: Q*

Optimal Cycle Is: T*

Number of Orders Is: n*

Total Cost Is: TC

 


Shortages Permitted Model

Demand rate: x

Ordering cost: C1

Holding cost: C2

Shortage cost: C3

Backorder cost: C4

Optimal Ordering Is: Q*

Optimal Shortage Is: S*

Total Cost Is: TC

Shortage Period Is: T2

Period per Cycle Is: T

 


Production and Consumption Model

Production rate: K

Demand rate: x

Holding cost: C2

Set-up cost: C1

Optimal Run Size Is: Q*

Production Cycle Is: T 1*

Optimal Cycle Is: T*

Cost per Cycle Is: TC


Production and Consumption with Shortages Model

Production rate: K

Demand rate: x

Setup cost: C1

Holding cost: C2

Backorder cost: C4

Optimal Production Is: q*

Optimal Inventory Is: Q*

Optimal Shortage Is: P*

Total Cost Is: TC

Period per Cycle Is: T

 


EOQ with Shortages and Lead Time

 

 

I: Base Economic Order Quantity

Total Demand

Ordering Cost

Holding Cost/unit/year

Unit Price

EOQ

Average Periodic Ordering Intervals

Total Number of Orders

Total Cost

 

II: EOQ with Shortages and Lead Time

Estimated Lead Time in Days

Shortage Cost/unit/year

EOQ

Level for Reorder Point

Maximum Inventory Level

Total Cost

Longest Delay Time in Days

 
 
 

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