Operations Management Formulas
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CycleTIme: t t 1 Hours 3600 seconds / unit || Theoretical Min workstations TM(n) || Efficiency% 100 r Units c nc Balance Delay= 100%-Efficiency% || Idle Time= nc t || Containers: demand( aiting processing)(1 ) k quantity c Avg. Cycle Inventory: L Q Q D || Pipeline Inventory D dL || Total annual inventory cost Annual Holding H Annual Ordering S 2 2 Q EOQ 2DS EOQ EOQ ||| TBO 52weeks / year ||| Inventory Position OnHand Inventory Scheduled Receipts Backorder H D R=Total demand during lead time= Demand/Day X Lead Time. Continuous Review System : Protection Interval=Lead time (L). SD of Demand during lead time (constant L)= dLT d L SD of demand during lead time (variable L)= 2 2 2 dLT d LT L d ||| Safety Stock= dLT z || Replenish if IP <=R Reorder point (R) for constant lead time= dL Safety stock. For variable dL Safety stock ||| Order Quantity EOQ Q D Total Q System Cost : C H S (H Safety Stock) 2 Q Periodic review system: Review Interval=Time btw orders =P. Protection Interval = P+Lead Time SD of demand during protection interval= PL d P L ||| Safety Stock= P L z Target Inventory level (T)= Average demand during protection + Safety stock = d(P L) Safety Stock Order Quantity= Target Inventory level-Inventory position= T IP . Replenish every P Periods, order T IP Units. Total P System Cost: C= dP D H S (H Safety Stock) 2 dP Non Instantaneous replenishment: Max Inventory: max p d Q p d D I Q || Annual Holding Cost C (H) S p 2 p Q Economic Production lost size ELS= ELS 2DS p d ELS |||| Time between orders (years) TBO H p D Production Time during each cycle= ELS/P Quantity Discounts: Q D H S PD 2 Q ||| Payoff matrix : Payoff profitQ if Q D or pD loss(Q D) if Q D Forecast Error; 2 2 t t t t t t E (E E) CFE D F || CFE E ||| E ||| MSE ||| ||| MAD E n n n 1 t t E MAPE 100% D Linear Regression: Y=a+bx ||| Naïve Forecasting, Forecast= t D WMA= 1 t 2 t1 3 t 2 WD WD WD .... || Exponential Smoothening= t1 t t t t t F D (1 )F or F (D F) t CFE CFE Tracking Signal or MAD MAD ||| t Trend Projection using Regression F a bt ||| Exponentially Smoothed Error: t t t1 MAD E (1 )MAD
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Operations Management Formulas
Transcript of Operations Management Formulas
CycleTIme: t t1 Hours
3600 seconds / unit || Theoretical Min workstations TM(n) || Efficiency% 100r Units c nc
Balance Delay= 100%-Efficiency% || Idle Time= nc t || Containers: demand( aiting processing)(1 )
kquantity c
Avg. Cycle Inventory: L
Q Q D|| Pipeline Inventory D dL || Total annual inventory cost Annual Holding H Annual Ordering S
2 2 Q
EOQ
2DS EOQEOQ ||| TBO 52weeks / year ||| Inventory Position OnHand Inventory Scheduled Receipts Backorder
H D
R=Total demand during lead time= Demand/Day X Lead Time.
Continuous Review System: Protection Interval=Lead time (L). SD of Demand during lead time (constant L)= dLT d L
SD of demand during lead time (variable L)= 2 2 2
dLT d LTL d ||| Safety Stock=dLTz || Replenish if IP <=R
Reorder point (R) for constant lead time= dL Safety stock. For variable dL Safety stock ||| Order Quantity EOQ
Q DTotal Q System Cost :C H S (H Safety Stock)
2 Q
Periodic review system: Review Interval=Time btw orders =P. Protection Interval = P+Lead Time
SD of demand during protection interval= P L d P L ||| Safety Stock= P Lz
Target Inventory level (T)= Average demand during protection + Safety stock = d(P L) Safety Stock
Order Quantity= Target Inventory level-Inventory position= T IP . Replenish every P Periods, order T IP Units.
Total P System Cost: C= dP D
H S (H Safety Stock)2 dP
Non Instantaneous replenishment: Max Inventory: max
p d Q p d DI Q || Annual Holding Cost C (H) S
p 2 p Q
Economic Production lost size ELS= ELS
2DS p d ELS|||| Time between orders (years) TBO
H p D
Production Time during each cycle= ELS/P
Quantity Discounts: Q D
H S PD2 Q
||| Payoff matrix :Payoff profitQ if Q D or pD loss(Q D) if Q D
Forecast Error;
2 2
t t
t t t t
E (E E)CFED F || CFE E ||| E ||| MSE ||| ||| MAD E
n n n 1
t
t
EMAPE 100%
D
Linear Regression: Y=a+bx ||| Naïve Forecasting, Forecast= tD
WMA= 1 t 2 t 1 3 t 2WD W D W D .... || Exponential Smoothening= t 1 t t t t tF D (1 )F or F (D F )
t
CFE CFETracking Signal or
MAD MAD ||| tTrend Projection using Regression F a bt |||
Exponentially Smoothed Error: t t t 1MAD E (1 )MAD
