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    Lot Sizing With Multiple Products Ordered and Delivered Seperately

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    ShivamKhare
    This document provides examples of lot sizing calculations for multiple products ordered independently, together, and using a tailored aggregation approach. It includes annual demand and cost parameters for three products: Litepro, Medpro, and Heavypro. Example 11-3 orders each product independently, finding the economic order quantity and costs for each. Example 11-4 orders all products together on the same delivery, reducing ordering costs. Example 11-6 uses a five-step procedure to determine an optimal tailored aggregation approach that balances ordering and holding costs across products. Cells in the worksheet can be modified to explore different cost scenarios.

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    Lot Sizing With Multiple Products Ordered and Delivered Seperately

    Uploaded by

    ShivamKhare
    56 views6 pages
    This document provides examples of lot sizing calculations for multiple products ordered independently, together, and using a tailored aggregation approach. It includes annual demand and cost parameters for three products: Litepro, Medpro, and Heavypro. Example 11-3 orders each product independently, finding the economic order quantity and costs for each. Example 11-4 orders all products together on the same delivery, reducing ordering costs. Example 11-6 uses a five-step procedure to determine an optimal tailored aggregation approach that balances ordering and holding costs across products. Cells in the worksheet can be modified to explore different cost scenarios.

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    This document provides examples of lot sizing calculations for multiple products ordered independently, together, and using a tailored aggregation approach. It includes annual demand and cost parameters for three products: Litepro, Medpro, and Heavypro. Example 11-3 orders each product independently, finding the economic order quantity and costs for each. Example 11-4 orders all products together on the same delivery, reducing ordering costs. Example 11-6 uses a five-step procedure to determine an optimal tailored aggregation approach that balances ordering and holding costs across products. Cells in the worksheet can be modified to explore different cost scenarios.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    56 views6 pages

    Lot Sizing With Multiple Products Ordered and Delivered Seperately

    Uploaded by

    ShivamKhare
    This document provides examples of lot sizing calculations for multiple products ordered independently, together, and using a tailored aggregation approach. It includes annual demand and cost parameters for three products: Litepro, Medpro, and Heavypro. Example 11-3 orders each product independently, finding the economic order quantity and costs for each. Example 11-4 orders all products together on the same delivery, reducing ordering costs. Example 11-6 uses a five-step procedure to determine an optimal tailored aggregation approach that balances ordering and holding costs across products. Cells in the worksheet can be modified to explore different cost scenarios.

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    Example 11-3

    Lot Sizing with Multiple Products Ordered and Delivered Seperately


    Annual demand for Litepro, DL = 10,000
    Annual demand for Medpro, DM = 4,000 The information for Table 11-1 is
    contained in Cells A15 to F19.
    Product specific ordering cost, sL = $ 100
    Product specific ordering cost, sM = $ 400 To redo Examples 11-3, 11-4, 11-6 for different values
    of product specific ordering costs, change Cells D5-D7
    Unit Cost, CL = on this worksheet to 300 (low product specific ordering costs)
    $ 100.00 and 3,000 (high product specific ordering costs). This allows a
    Unit Cost, CM = $ 400.00 comparison of the value of complete aggregation and
    tailored aggregation on worksheets Example 11-4 and
    Example 11-6.
    Common order cost, S = $ 10,000
    Holding cost, h = 20%
    Order each product independently (Example 11.3)
    # orders/year EOQ Order Cost Holding Cost Total cost
    Litepro 3.1 3,178 $ 31,780 $ 31,780 $ 63,561
    Medpro 3.9 1,020 $ 40,792 $ 40,792 $ 81,584
    Heavypro 0.0 #DIV/0! $ - #DIV/0! #DIV/0!
    $ 72,573 #DIV/0! #DIV/0!
    Example 11-4

    Lot Sizing with Multiple Products Ordered and Delivered Together


    Annual demand for Litepro, DL = 10,000
    Annual demand for Medpro, DM = The information for Table 11-2 is
    4,000 contained in Cells A15 to F19.
    Annual demand for Heavypro, DH = -
    Product specific ordering cost, sL = $ 100 𝑛^∗ (𝐶𝑒𝑙𝑙 𝐵17)=√((𝐷_𝐿 ℎ𝐶_𝐿+𝐷_𝑀 ℎ𝐶_𝑀+𝐷_𝐻
    Product specific ordering cost, sM = $ 400 ℎ𝐶_𝐻)/(2𝑆^∗ ))
    Product specific ordering cost, sH = $ -
    Unit Cost, CL = $ 100
    Unit Cost, CM = $ 400
    Unit Cost, CH = $ -
    Common order cost, S = $ 10,000
    Joint order cost, S* = $ 10,500
    Holding cost, h = 20%
    Order all products simultaneously (Example 11.4)
    # orders/year Order Size Order Cost Holding Cost Total cost
    Litepro 4.98 2,010 $ 20,096
    Medpro 4.98 804 $ 32,153
    Heavypro 4.98 - $ -
    52,249 $ 52,249 $ 104,499
    Example 11-5: Aggregation with capacity constraint

    Demand per product, Di 10000


    Holding cost, h 20%
    Unit cost per product, Ci $ 50
    Common order cost, S $ 500
    Supplier specific order cost, si $ 100
    Number of suppliers 4
    Truck capacity 2,500

    Combined order cost across all suppliers, S* $ 900

    Ignoring Capacity Constraint


    Optimal order frequency/year, n* 14.91 𝑛^∗ (𝐶𝑒𝑙𝑙 𝐵14)=
    Quantity ordered from each supplier 670.82 √((∑26_(𝑖=1)^4▒ 〖𝐷 _𝑖 ℎ𝐶_𝑖 〗 )/
    Total amount on truck 2,683.28 (2𝑆^∗ ))
    Annual order cost $ 13,416
    Annual holding cost $ 13,416

    With Capacity Constraint


    Total amount on truck 2500
    Quantity ordered from each supplier 625.00
    Order frequency/year 16.00
    Annual order cost $ 14,400
    Annual holding cost $ 12,500

    Change the number of suppliers per truck in Cell B8 from


    2 to 6 and see how the quantity order / supplier and the
    optimal order frequency changes in Cells B22, 23
    for the capacity constrained case.
    ℎ𝐶_𝑖 〗 )/
    Example 11-6

    Lot Sizing with Multiple Products (Tailored Aggregation)


    Annual demand for Litepro, DL = 10,000
    Annual demand for Medpro, DM = 4,000 The information for Table 11-3 is contained in Cells A22 to F26.
    Annual demand for Heavypro, DH = -
    As values of product specific order costs are changed in sheet
    Product specific ordering cost, sL = $ 100 Example 11-3, run Solver to get the optimal value of Cell C15.
    Product specific ordering cost, sM = $ 400
    Product specific ordering cost, sH = $ -
    Unit Cost, CL = $ 100
    Unit Cost, CM = $ 400
    Unit Cost, CH = $ -
    Common order cost, S = $ 10,000
    Holding cost, h = 20%

    Solution Using 5-step Procedure


    Step 1 Step 2 Step 3 Step 4, 5
    ni ni mi ni
    Litepro 3.1 31.6 1 #DIV/0!
    Medpro 3.9 20.0 1 #DIV/0!
    Heavypro 0.0 #DIV/0! #DIV/0! #DIV/0!

    Table 11-3
    # orders
    /year Order Size
    n Q Order Cost Holding Cost Total cost
    Litepro #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
    Medpro #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
    Heavypro #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
    #DIV/0!
    Example 11-6

    ained in Cells A22 to F26.


    sts are changed in sheet
    ptimal value of Cell C15.

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