Arena Material: chapter 5 - AS Nida
Arena Material: chapter 5 - AS Nida Arena Material: chapter 5 - AS Nida
odel 5-4: (s, S) Inventory Simulation nventory Review, Replenishment “Take inventory” just past midnight each day So at exactly times 0, 1, 2, ..., 119 (not 120 ... see below) Two managerially-chosen constant integers s = 20 and S = 40 (must have s < S if we change these values) If I(t) ≥ s, do nothing until next inventory evaluation exactly 24 hours later If I(t) < s, order S – I(t) items from supplier (order “up to” S) Order does not arrive instantly from supplier, but after a delivery lag (a.k.a. lead time) ~ UNIF(0.5, 1.0) day, so sometime during the last half of the day of ordering – In the meantime, inventory level could fall further from additional demands, so inventory level will not necessarily pop up to S when the order arrives, but to something less than S
odel 5-4: (s, S) Inventory Simulation ost Structure Average ordering cost per day When an order is placed, incur a fixed cost of $32, plus an incremental cost of $3 per item ordered If no order is placed at the beginning of a day, there’s no ordering cost, not even the fixed cost At end of simulation, divide total of ordering costs by 120 Average holding cost per day Whenever I(t) > 0, incur $1 per day per item on hand Average holding cost = Average shortage cost per day Whenever I(t) < 0, incur $5 per day per item in backlog Average shortage cost =
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odel 5-4: (s, S) Inventory Simulation<br />
nventory Review, Replenishment<br />
“Take inventory” just past midnight each day<br />
So at exactly times 0, 1, 2, ..., 119 (not 120 ... see below)<br />
Two managerially-chosen constant integers s = 20 and<br />
S = 40 (must have s < S if we change these values)<br />
If I(t) ≥ s, do nothing until next inventory evaluation exactly<br />
24 hours later<br />
If I(t) < s, order S – I(t) items from supplier (order “up to” S)<br />
Order does not arrive instantly from supplier, but after a<br />
delivery lag (a.k.a. lead time) ~ UNIF(0.5, 1.0) day, so<br />
sometime during the last half of the day of ordering<br />
– In the meantime, inventory level could fall further from additional<br />
demands, so inventory level will not necessarily pop up to S when<br />
the order arrives, but to something less than S