| | To compute lot-size-related costsAs part of the
optimization procedure for logistic parameters, LN calculates the total
cost during the optimized period. Note The computation only
considers the time period that you specified in the Resource Cost Values (cprao3120m000) session. Calculation TC = ICC + COI + SCN + SCO Where: | TC | total cost during optimized period | | ICC | inventory carrying cost | | COI | cost of obsolete items | | SCN | setup cost (normal rate) | | SCO | setup cost (overtime rate) |
Inventory carrying cost ICC = AIL * (IP/100)* C * L Where: | ICC | inventory carrying cost | | AIL | average inventory level | | IP | inventory cost percentage | | C | material cost of the item (standard cost price) | | L | length of time period (in days) |
Example: inventory carrying cost Data: | AIL | 1200 kg (average inventory level) | | IP | 0.1 %/day (inventory cost percentage) | | C | 45 $/kg (material value) | | L | 30 days (length of time period) |
ICC = AIL * (IP/100) * C * L Result of the
calculation: ICC = 1620 $ (inventory carrying cost for the period of 30 days) Cost of obsolete items COI = AIL * C * (Ri/100) * L/F Where: | COI | cost of obsolete items | | AIL | average inventory level | | C | material cost of the item (standard cost price) | | Ri | risk of turning obsolete (percentage by day) | | L | length of time period (in days) | | F | number of times that the item is produced in the time period |
Example: Cost of obsolete items Data: | AIL | 1200 kg (average inventory level) | | C | 45 $/kg (material value) | | Ri | 1 %/day (risk of turning obsolete) | | L | 30 days (length of time period) | | F | 20 (number of times that the item is produced in
the time period) |
COI = AIL * C * (Ri/100) * L/F Result of the
calculation COI = 810 $ (cost of obsolete items) AIL = D / (2 * F) Where: | D | total demand during the time period (in inventory unit) | | F | number of times that the item is produced |
Example: average inventory level Data: | L | 30 days (length of time period) | | D | 48,000 kg (total demand during the time period) |
If the inventory is
replenished once every 30 days, to a level of 48,000 kg, the average level is
24,000 kg. However, if the
inventory is replenished 20 times in every 30 days, to a level of 2400 kg, the
average level is 1200 kg. AIL = D / (2 * F) Result of the first
calculation: | F | 1 (number of times that the item is produced) | | AIL | 24,000 kg (average inventory level) |
Result of the second
calculation: F = 20 AIL = 1200 kg F = D / LS Where: | F | number of times that the item is produced | | D | total demand during the time period (in inventory unit) | | LS | lot size |
Setup cost (normal rate) SCN = F * S' * R * (1 + SR/100) Where: | SCN | setup cost (normal rate) | | F | number of times that the item is produced | | S' | setup time during normal working hours [hours] | | R | operation rate (cost per hour) | | SR | the setup rate percentage of the resource |
Setup cost (overtime rate) SCO = F * S" * R * (1 + SR/100) * (1 + OR/100) Where: | SCO | setup cost (overtime rate) | | S" | setup time during overtime hours [hours] | | OR | overtime rate percentage |
You can define the following data in the Resource Cost Values (cprao3120m000) session: - Start Date
- Finish Date
- Overtime Tariff Percentage (OR)
- Overtime Percentage (SR)
- Risk Percentage by Day (Ri)
- Inventory Cost Percentage (IP)
The result of the
computation is displayed in the Plan Items - Optimized Lot Sizes (cprao3110m000) session. | |