Chapter 4: Q14PE. (page 585)
None of the techniques for determining order quantity consider this important non-economic factor that could make the order quantity infeasible.
Capacity.
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Model most appropriate when inventory is replenished only in fixed intervals of time, for example, on the first Monday of each month.
Question: When overtime is used to meet demand and avoid the costs associated with hiring and firing.
Question: What two basic questions must be answered by an inventory control decision rule?
Given the following history, use a three-quarter moving average to forecast the demand for the third quarter of this year. Note, the 1st quarter is Jan, Feb, and Mar; 2nd quarter Apr, May, Jun; 3rd quarter Jul, Aug, Sep; and 4th quarter Oct, Nov, Dec.
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
Last year | ||||||||||||
This year |
Question: Under which conditions would a plant manager elect to use a fixed order quantity model as opposed to a fixed–time period model? What are the disadvantages of using a fixed–time period ordering system?
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