1 B EFFECTS OF UNIT VALUE AND SERVICE LEVEL ON SAFETY STOCK CARRYING COST R AB AU AF AG WORK AREA FOR CHARTS 2 3 1. INPUT 4 Element Symbol Amount Measure 2. WORK AREA Element 4. ONE-WAY DATA TABLES FOR SAFETY STOCK Symbol Amount Measure CSL 170 UL 170 SL 170 UD 170 SD 170 5 Decision variable 6 Service policy CSL Demand during lead time 95% % cycles w/o Average 92.00% 145 10 167 2 75 10 91.152 2 166.76 7 Daily demand Std dev UX SX 580.68 units 103.2804 units 94.00% 161 15 168 4 136 15 130.33 4 169.58 8 Average UD 19.90 units 96.00% 181 98.00% 20 169 6 200 20 170.69 6 174.17 212 25 169 8 264 25 211.56 8 180.41 9 Std dev SD 4.16 units 3. RESULTS 99.00% 240 30 170 10 329 30 252.69 10 188.12 10 Lead time Element Symbol 1 Average UL 29.18 days Reorder point S 12 Std dev SL 5.07 days Safety stock 3 Order quantity SS Q Amount Measure 750.5632 units 169.88 units 539.02 units 99.90% 319 99.99% 35 171 12 395 35 293.96 12 197.13 384 40 171 14 460 40 335.33 14 207.29 Goal Seek ? 4 Cost information 15 Unit Cost 16 Holding cost factor 17 Order Cost CHA 50.00 20% 200.00 Safety stock holding cost Cycle stock holding cost Annual ordering cost SSHC 1,698.81 CSHC 2,695.09 2,695.09 $ Set cell: SIS15 $ To value: 2695.09 $ By changing cell: SDS6 18 19 Expected total annual cost ETAC 7,088.99 $ OK Cancel 20 21 22 5. CHARTS 23 Effect of cycle service level on safety stock 24 Effect of lead time velocity (UL) on safety stock Effect of lead time variability (SL) on safety stock Effect of average demand (UD) on safety stock Effect of demand variability (SD) on safety stock 25 26 27 28 CSL 29 170 500 SL 450 80 81 82 350 83 84 35 300 250 200 36 87 88 89 40 71 72 100 50 0 90.00% 92.00% 94.00 % 96.00% 98.00% 100.00% 102.00% 172 172 171 171 170 170 169 169 168 168 167 CSL 400 350 300 250 200 150 100 50 0 30 50 UL UD 400 350 300 SD 250.00 200.00 150.00 200 150 100 50 100.00 50.00 0 10 20 30 40 50 UD 8 14 16 SD 15 SL 43 44