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In Chapter 12,
we take a look at inventory status records.
This is
something that tells us when we
need to order something.
So, looking at in inventory status record, and I'm looking at slide 9 at the
moment, and I'm going to be working with Slide 10,
11, and 12, momentarily.
We start with
the gross requirements, on hand inventory, and scheduled receipts, for a dense foam
for the inner shell of a bicycle helmet,
are indicated in the time phased inventory status record on the next slide.
It's lead time is three weeks. Complete the inventory status record, showing when
planning orders should be made. Use lot for lot ordering.
So, looking at Slide 10,
lot for lot ordering
is you order
what you need when you need it, period.
Why is this important? Well, if it's something that's going to go bad, become
obsolete,
deteriorate,
in... how good is a strawberry... Strawberries mold very quickly.
You want to keep them as fresh possible. You don't want to buy strawberries,
and
have them go bad on you, so you want to order them when you're going to be
using them. Now,
dense foam, you're going to probably be able to
keep a little bit longer. It's not going to go bad on you.
You need to take a look
at
how much storage space you have, etc. So, right now we're saying we don't
have a storage space. We only order what we need, when we need it,
and we're able to physically do that. So, in lot for lot ordering,
we're ordering what we need. If you notice up into the left hand corner,
this is the old
fashioned way to do it. Again, this is done on the computer now,
but you would have 'x' number of time blocks, 0:01:51.910,0:01:53.430 or time buckets.
Here, we know that our time buckets are in weeks because
it says 'lead time in weeks' in this top left corner. It is giving us the
raw material that we will be using,
and the lead time. This is our information corner, and because that's
in weeks, I know that each one of these time buckets
will also
be
in weeks.
So, I'm looking at an 8 week time period, here,
on my dense foam.
Now, looking down
on this, let's take a look at the left hand side, going down, and the information.
I'm starting out with gross requirements.
Gross requirements are what I plan on
using.
How much of this dense foam do I plan on using each and every single week?
That's the gross requirement. Next, scheduled receipts.
It's how much do I plan on getting in. This is what's going to be delivered
during the week, and usually we say at the beginning of the time bucket, or
beginning of the time period.
'On Hand' is the only thing that's listed at the end.
How many are left over? This has
a number.
We're in before the time buckets, and that's that last time period
that last time bucket, in this case, there were one hundred left over,
that we have on hand, we have available to use one hundred.
Next is net requirements.
Net requirements is a need.
How many do we need?
We're going to need to order at some point, and this tells us that we need some.
Planned order releases
are when we plan to order.
How many, and when do we plan to place an order.
Now, if you place an order,
you should receive an order.
That only makes sense, so the number that you place, you should be receiving,
the lead time, weeks later, and we'll discuss that as we go along.
So, looking at our problem here,
our dense foam has a lead time
of three weeks.
We're starting with one hundred on hand,
and I'm gonna use the bottom of this page as a scratch paper to begin with,
and,
we can go on and
if I need to move over
for more scratch paper, I'll go back over to the Smart Board so that we can do
our work, uh...
back-and-forth with this.
So, let's start with
week one!
Week one,
we have on hand,
one hundred units.
That's how many was left over, we already have
a schedule receipt of
four hundred and fifty (450) units.
That's going to give us a total...
that's going to give us a total to use
of five hundred and fifty (550) units.
I wanna subtract out from there how many I plan on using,
so, I want to subtract out
my gross
requirements,
how many I plan on using for that week,
and if I plan on using a hundred and twenty five
units,
that's going to leave me left
four hundred
and twenty five units. So, at the end of the week one,
I'm going to have
four hundred
and twenty five units left over.
You always need to put
the number left on hand at the end of the time bucket.
There's our week one.
If I look at week two...
let's get rid of the math here and we'll just keep working on the bottom of this page.
Let's look at week two.
For week two,
we're looking
at
the end of week one
on hand
we had four hundred and twenty five (425) units.
Our scheduled receipts
are zero. So, that gives us a total
of four hundred and twenty five (425)
units to use. I'm going to subract out
my gross requirements,
which is three hundred and twenty five (325)
which means, I have left
one hundred (100) units at the end
of week two.
So, on the 'on hand' at the end of week two,
I'm going to put down one hundred units.
Moving on,
to weeks three,
let's get rid of our math down there,
and go back to
week three.
Week three,
I had left on hand
one hundred units.
I do have a scheduled receipt that I want to add four hundred and twenty-five (425)
more,
which gives me
a total to use
of
five hundred
and twenty-five (525) units of our dense foam.
I wanna subtract out
my gross requirements for week three. I plan on using two hundred and
seventy five (275).
That gives me left over
two hundred and fifty (250) units, and again, that's going to go in my 'on hand.'
Moving on
to week four.
Week four,
I have
two hundred and fifty (250) units
left on hand.
I want to add my scheduled receipts are zero.
So that gives me
a total
of two hundred and fifty (250) units to use.
In week four,
I plan on having
to use two hundred (200) units. I'm going to subtract out
my gross requirements of two hundred (200) and that leaves me
fifty (50) units left.
So, I have fifty (50) units left over at the end of week four.
Moving right along to week five.
In week five, I have
on hand
fifty (50) units
with a scheduled receipt of zero,
which gives me
a total
of fifty (50) units to use,
but if I look at my gross requirements,
I plan on using
three hundred (300).
That means I have negative two hundred and fifty (-250) units. Can you have two hundred
and fifty units in the negative?
Not really. It means you're missing units. You plan on using more than you have.
That negative signifies a need.
In week five, I have a need
of
two hundred
and fifty (250) units.
I am short
units. It's a need,
because I have that need, I need to plan
to order them. Remember, this is
a
planning
piece here.
What we are doing is looking... our inventory status records...
are... helps us plan when we need to order to make sure we have enough on
hand,
so that's what we're going to be looking at here.
So,
two hundred and fifty units, I have a lead time
of three weeks,
which means I need to go back one,
two,
three weeks,
to place an order.
In lot for lot ordering,
we order the number that we need,
no more no less.
So, I'm going to order three weeks in advance,
or in week two,
two hundred and fifty (250) units.
Now,
if I order in week two, three weeks later I should get it in.
So,
I place this order,
it's gonna signal
a scheduled receipt of
two hundred and fifty (250) units.
Why? Because I placed an order for two hundred and fifty (250) units.
If you're placing an order of two hundred fifty (250) units you should get two
hundred fifty (250) units in.
If you do not get two hundred and fifty (250) units in, check your suppliers,
something's wrong.
So,
I have my week five, and excuse me...
what I have already done, I now need to redo
week five
because I made a change, I've placed an order, and I'm getting something in.
So, I have on hand,
at the end of week four,
fifty (50) units.
I plan on receiving in week five now
two hundred fifty (250) units. That gives me three hundred units total that I can
use.
Out of those three hundred (300) units, I'm gonna subtract out my gross requirements, which
are three hundred (300) units which will leave me
with zero left on hand at the end of week five.
We can now move on
to week six.
At the
end of week five,
I had left on hand zero.
I have scheduled receipts for week six of zero so I have a zero units
that I'm able to use.
But my gross requirements say I'm going to need a hundred and seventy five (175) units.
Again, that gives me a negative number.
It signifies that I have a need.
I have a need
of a hundred and seventy-five (175) units in week six.
Tells me I need to place an order.
My lead time again is three weeks.
I'm going to go back
one, two, three weeks,
and place an order of a hundred and seventy-five (175).
If I place an order,
I better receive an order.
The lead time, again, is three weeks, so if I place an order in week three,
in week six,
I should get in an order for a hundred and seventy five (175).
Again, if you are placing an order,
you better get in the same amount that you've ordered,
or you need to check your supplier, and possibly get a new supplier.
So if I re-do now
week six,
I had on hand zero left at the end of week five,
but I have a scheduled receipt now of a hundred and seventy-five (175) which gives me
a hundred and seventy-five to use.
I plan my gross requirements
using a hundred and seventy-five which will leave me zero
on hand
at the end of week six.
Moving on to week seven,
week seven I have
on hand
zero.
I have scheduled receipts of zero at this time.
Gives me
a total of zero to use.
My gross requirements say I want to use three hundred and fifty (350).
Gives me a negative.
What does that negative mean?
It means I have a need
for
dense foam....
units of dense foam...
and I need
three hundred
and fifty units (350) of the dense foam.
I need to go back
three weeks
one,
two, three,
that's gonna give me week four,
and in week four, I now need to order three hundred and fifty (350) units.
If I order three hundred fifty (350) units in week four,
in week seven,
I should be getting the same number of units in.
I can now re-do
week seven.
At the end of week six, I had on hand zero,
but I now have a scheduled receipt of three hundred and fifty (350).
So, I have a total of three hundred and fifty (350) units to use.
My gross requirements, subtracting them out,
three hundred and fifty (350) units leave me
zero left on hand.
At the end of week seven, I will have zero left on hand.
Moving on to week eight,
I have on hand
zero.
Scheduled receipts are also zero which gives me a total of zero to use.
But I said that my gross requirements
are two hundred
and fifty (250).
So, that means
I have a negative number again. What does the negative number mean? It means I have
a gross...
excuse me... a net requirement.
How many units do I need?
Two hundred and fifty (250) units.
If i need two hundred fifty (250) units for week eight,
when do I need to get those units?
Three weeks before, one, two, three,
which would be week five.
Means I need... I plan on placing an order for two hundred and fifty (250).
By placing an order, I should get them in three weeks later, which would be week eight.
If I redo week eight,
I'm going to take a look, I had on hand zero, a scheduled receipt
of two hundred and fifty (250), which gave me two hundred and fifty (250) units to use,
subtract out my gross requirements of two hundred and fifty,
and it leaves me zero units at the end.
This
is lot
for lot ordering. It's very basic,
very easy.
If we move on,
to getting some reality in ordering,
we need to take a look
at adding in safety stock.
Now, we've already talked about safety stock in Chapter Eleven.
What is safety stock?
Safety stock is units that we have on hand for when they're needed,
so that if something happens, bad weather, a truck got a flat tire, or is just
running late,
it's
okay, we we still have stuff that we can produce
with...
if there's
uh... like strawberries, every now and then you get a rotten strawberry in there,
so if we're looking at something like that happening,
we're looking at... we have extra on hand
to make up for those that
things that have gone bad, etc. We're working with the dense foam again,
and we still have that information up in
that left hand corner.
We have the dense foam with a lead time of three weeks
but now we have safety stock
(SS) and sometimes this is written as required on hand. It's the exact
same thing, safety stock and required on hand
are identical.
It's just different people call it different things. So looking at
the safety stock of twenty five (25)
that means
on hand,
this line
can never go
below twenty-five (25). It always has to say there are at least twenty five (25) units
there.
So, we need to take that into consideration now
as we are going through
our problem.
So, let's start out again,
with week one,
taking a look at what we had on hand at the end of our last time bucket,
and it was one hundred (100).
We do have a scheduled receipt in week one,
of four hundred and fifty (450).
This gives us
five hundred and fifty units of the dense foam to work with.
We plan on using
gross requirements,
a hundred and twenty five (125).
So, we subtract that out.
It gives us left,
four hundred and twenty five (425) units on hand. Is four hundred and twenty-five (425)
bigger than twenty five units?
The last time I did math it was,
so we're good.
We can say we have four hundred and twenty five (425) units left
on hand
at the end of week one.
Moving along to week two,
at the end of week one,
we had
four hundred and twenty five (425) units on hand.
We had a scheduled receipt
of zero for week two.
So, our total is four hundred and twenty five (425) units we have available to use
during week two.
On week two,
our gross requirements, what we plan on using, gives three hundred and twenty
five (325) units.
This gives us left over one hundred (100) units.
Again, check,
is one hundred (100)
greater than twenty five (25)?
The math that I use it is.
So, we're good to go
for week two
in our planning,
with one hundred (100) units left at the end of week two.
Moving on to week three.
We have on hand
in week three...
excuse me at the end of week two,
one hundred (100) units.
We do have a scheduled receipt
of four hundred and fifty (45) units,
that gives us a total of five hundred and fifty units to use.
In week three,
we plan on using our gross requirements of two hundred and seventy
five (275).
This gives us
leftover two hundred and seventy five (275) units. Again,
is that bigger than our twenty five (25) safety stock?
Yes it is.
So, again,
we are good to go. The end of week three, left on hand
is two hundred and seventy-five (275) units.
Moving along to week
four...
uh... in week four,
we had left on hand at the end of week three
two hundred and seventy five (275) units.
We have no scheduled receipts,
which means we have two hundred and seventy five (275) units available to use.
In week four,
we want to subtract out our gross requirements, what we plan on using,
which is two hundred (200) which leads us seventy five (75).
Looking at this,
seventy five (75) units,
is that greater than our needed safety stock of twenty five (25)? Yes,
so week four is good to go with seventy five (75) units left on hand at the end of
the week.
Week five.
We're looking at week five
where we have seventy five (75) units on hand at the end
of week four.
At this point in time we have no scheduled receipts which means we have seventy
five (75) units we can use.
Our gross requirements, what we plan on using, though,
is three hundred (300) unites.
That means we have a negative two hundred and twenty five (-225) units. Now,
what did we say a negative was,
when we did the lot for lot ordering before?
We said that that negative
was that we have a need
or a short number, the number of units we need to produce what we need to
produce.
We're short two hundred and twenty five (225) units, but
we need to take into consideration our safety stock of
another twenty five (25) units that
have to be left on hand.
So, we're actually short
two hundred and fifty (250) units.
So, in week five, we have a need
for two hundred
and fifty (250) units.
If we have a need in week five of two hundred and fifty (250) units,
our lead time...
that I covered up there, sorry...
our lead time is still
three weeks.
So, we need to order three weeks in advance, one, two., three weeks in advance,
that's week two,
two hundred
and fifty (250) units.
If I order two hundred and fifty (250) units in week two
I'm assuming I'm going to get them in
three weeks later, which would be week five,
or I'm going to have a scheduled receipt
of two hundred and fifty (250) units.
If I now redo week five, I had on
hand, seventy five (75) units,
a scheduled receipt of two hundred and fifty (250),
that gives me three hundred
and twenty five (325) units
to be able to use.
I want to subtract out my gross requirements of three hundred,
and that leaves me with twenty five (25) units left over.
If that does, does that twenty five units satisfy our safety stock?
Yes it does,
because our safety stock has to be
twenty five (25) units. So the end of week five,
we're going to have
twenty five (25) units.
Moving along
to week six.
Week six,
said that we had on hand left over at the end of week five, twenty five (25) units,
at this time no scheduled receipts, so we have twenty five (25) units that we can use.
We have gross requirements, what we plan on using,
in week six of a hundred and seventy-five (175).
That means I'm short a hundred and fifty (150) units,
but am I short
a hundred and fifty (150) units?
Now I have to take into consideration my safety stock.
So, subtract out another twenty five and actually I am short a hundred and seventy five
(175) units,
which means
my net requirements
for week six
are a hundred and seventy-five (175).
My net requirements says I'm going to need to plan an order
because of my lead time being three weeks,
I better order three weeks in advance, or in week three
order a hundred and seventy five (175) units
If I order a hundred and seventy five (175) units in week three,
when will I get them in?
Three weeks later, in week six, I should get in a hundred and seventy five (175) units.
If not, check your supplier, something's wrong!
If I redo week six now, I had on hand, at the end of week five,
twenty five units. I have a scheduled receipt
of a hundred and seventy-five (175), which gives me two hundred (200) units.
I plan on using
a hundred and seventy-five (175), subtract out your gross requirements there,
and that leaves me twenty five (25) units left over.
Does that satisfy my safety stock?
Sure does! My safety stock has to be
twenty five (25)
units.
Moving right along to weeks seven,
we are looking
at having, on hand at the end of week six
twenty
five (25) units.
My scheduled receipt right now is zero. That gives me twenty five (25) units, total,
to use.
My gross requirements, what I plan on using though,
is three hundred and fifty (350) units.
That means I'm short three hundred and twenty five (325) units,
but is that really true?
No, because I have to take into consideration my safety stock,
so, I need to subtract out twenty-five (25) more
units, so I'm actually short three hundred and fifty (350) units.
What does that signify? A need,
or a net requirement,
of three hundred
and fifty (350)
(350) units.
If I'm going to need in week seven, three hundred and fifty (350) units,
I need to plan to order them in advance, there's that three week lead time.
So if I order this in advance, three weeks in advance would be week four,
I'm going to order three hundred and fifty (350) units.
If I order three hundred and fifty (350) units in week four, I need to plan on getting them
in, or
schedule my receipt of those units,
so in week seven, I now have a scheduled receipt by three hundred and
fifty (350) units. So, let's redo are math for week seven now.
In weeks seven, we had on hand at the end of week six,
twenty-five (25) units, and we have a scheduled receipt of three hundred
and fifty (350) units. That gives us three hundred and seventy-five (375) units.
Subtracting out
our gross requirements, what we plan on using, is three hundred and fifty (350) units,
which leaves us twenty five (25) units.
Is that ok?
For our safety stock, it covers our safety stock, our safety stock is twenty five (25)
units so at the end of week seven we will have
twenty-five (25) units.
Looking at the last time bucket,
or time block,
on this inventory status record
is week eight,
and we're looking at the end of week seven, on hand of twenty five (25) units and
a scheduled receipt at this point in week eight of zero.
That gives us twenty five (25) units to use,
but our gros requirements, that we need to subtract out, are two hundred and
fifty (250). That means
we're actually short two hundred and twenty-five (225), but is that true? No. Remember
that safety stock!
We need to subtract out those twenty five units, which means we're short
two hundred and fifty (250) units.
Where do we write that?
What does that tell us?
That the net requirement
is
two hundred and fifty (250) units.
If we have a net requirement of two hundred and fifty (250) units, we have to plan
to order this.
When do we plan on ordering it?
Look at our lead time, three weeks in advance.
We order
two hundred and fifty units, then, in week five. If we order in week five
we should get it in three weeks later,
our scheduled receipt
in week eight of two hundred and fifty (250) units.
Let's re-do
week eight.
We start
with
on hand
at the end of week seven twenty five (25) units,
add in our scheduled receipts of two hundred and fifty (250), that gives us two
hundred and seventy-five (275). Subtract out our gross requirements
of two fifty (250), and that leaves us twenty five units left over.
So, at the end of week five...
or excuse me... at the end of week eight, we're looking at having
twenty five (25) units left over.
This is starting... getting reality...
in ordering, and in our inventory status records,
but it's really just the tip of the iceberg.
We're looking at reality in ordering, and we're really looking at
reality based here folks.
More information, looking again up at this left hand
corner of this inventory status report,
the dense foam again,
still have a lead time of three weeks, we're still looking at a safety stock in
twenty five (25) units,
but now we have a minimum order size of four hundred (400) units.
You cannot ever order less than four hundred units.
That's the minimum amount you can ever order. It doesn't matter how many you
need. If you place an order the minimum must be four hundred (400) units.
Then there's a lot size after the minimum.
After four hundred (400) units, you can order it lots of fifty (50).
That means
you can order four hundred (400), four hundred and fifty (450), five hundred (500), five hundred and
fifty (550) units,
were looking at
you can never order five hundred and twenty-two (522) units, it has to be in the
lot size, the minimum order four hundred (400), and then the lot size,
after that, what you need.
So, let's take a look again, just like what we've been doing, but now taking
into consideration this minimum order, and this lot size after are minimal.
So, if we take a look
at week one,
we're taking a look that we have on hand one hundred (100) units.
We do have a scheduled receipt planned of four hundred and fifty (450) units,
which is going to give us five hundred and fifty (550) units.
We plan on using gross requirements
a hundred and twenty five (125) units this week.
and if I do my math right, that leaves four hundred and twenty-five (425) units. Is four
hundred and twenty-five (425) greater than twenty five (25)?
Sure is! Therefore, we can say that, left on hand at the end of week one
will be
four hundred and twenty-five (425) units.
Looking at week two,
in week two, we find that we have left over, left on hand,
from the end of week one, four hundred and twenty five (425) units,
with no scheduled receipts.
So, we have four hundred and twenty five (425) units to use.
What's our gross requirements for the week?
Three hundred and twenty five (325) units,
which will leave us one hundred (100) units left on hand.
Does that one hundred (100) units satisfy our safety stock of twenty five (25)?
Yes, one hundred (100) is greater than twenty five (25), therefore we are able
to say, at the end of week two, we will have one hundred (100) units left.
If we look at week three, we have on hand at the end of week two one hundred units,
with a scheduled receipt in week three of four hundred and fifty units.
That gives us five hundred and fifty (550) units to use.
How many do we plan on using? Two hundred and seventy-five (275) units. Those are our
gross requirements.
That leaves us two hundred and seventy
five (275) units left over. Does that satisfy our safety stock? Sure does!
So, two hundred and seventy five (275) units are left
on hand.
Moving on to week four,
we had on hand, at the end of week three, two hundred and seventy-five (275) units to be
able to use in week four.
Scheduled receipts are zero, so that gives us a total of two hundred and seventy five (275)
(275) units available to use
in week four.
What's your gross requirements how many do you plan on using?
Two hundred units. That leaves us seventy-five units. Does that satisfy
our safety stock minimum required on hand?
How much do you have to have on hand? At least twenty five units.
This says we'll have seventy five (75) units. Last time I checked,
seventy five (75) was greater than twenty five (25), so we're okay there.
Moving on to week five,
we had left on hand seventy-five (75) units
at the end of week four, with no scheduled receipts at this time,
which gave us a total seventy five units to be able to use.
Well, what's our gross requirements that we need to subtract out, how many do we
plan on using?
Three hundred (300)
units. That means we're short two hundred and twenty five (225) units...oh, but wait a
minute!
Remember that safety stock!
Let's subtract out to make sure that we cover
that,
and that will give us
two hundred and fifty (250) units that we're short.
So, remember we said on that last slide, that our net requirements, we're short
two hundred and fifty (250) units. That's a need, we have a need
for two hundred and fifty (250) units
during week five.
Can you order two hundred and fifty (250) units though?
No. Remember our minimum
order is four hundred (400) units,
so if we go back, our lead time, three weeks one, two, three,
in week too
we're going to order four hundred (400) units,
not
two hundred and fifty (250) that we actually need,
but that minimum order size of four hundred (400) units,
which is greater than the amount that we need.
So, if we order
four hundred (400) units that planned order release in week two, three weeks later in week
five we should get in four hundred (400) units.
If you're not getting in the same amount that you're ordering, check your supplier,
something's wrong.
So, if we re-do the math on week five
we had on hand seventy five (75) units at the end of week four,
we now have a scheduled receipt planned of four hundred (400) units which gives us
four hundred and seventy five (475) units,
and we plan on using
three hundred (300) of them,
which leaves us with a hundred and seventy-five (175) left over.
Is a hundred and seventy-five (175) greater than twenty five (25), we're ok with our safety
stock there,
yes!
So, if we look now
to week six,
we have a hundred and seventy-five (175)
on hand
a scheduled receipt of zero, which gives us a hundred and seventy-five (175),
what's our gross requirements, a hundred and seventy-five (175), that leaves us zero.
Oh, wait a minute, what about the safety stock?
Let's subtract that out,
and we find that we are short, we actually have a need
of twenty five.
Can you order twenty five?
No, you can't. What's the minimum number you have to order?
Four hundred (400).
So, in week three, we should plan on ordering four hundred (400) units to be able
to get that in,
in week six, so that we have enough
to use here,
of the dense foam.
So, if we redo week six,
we had on hand a hundred and seventy-five (175), we have a scheduled receipt of four
hundred (400),
that gives us five hundred and seventy-five (575),
minus a hundred and seventy-five (175) that we're going to use, which leaves us four
hundred left over. Is four hundred greater than twenty five, satisfying our
safety stock?
Sure is. So we're good to go there.
Moving on,
to week seven,
we have on hand, at the end of week six,
four hundred (400)
units. Let's erase that and write that over again, I apologize.
So, at the end of week six we have on hand four hundred (400) units.
We don't have any scheduled receipts at this time,
that gives us four hundred (400) units to be able to use.
We need to figure out how many we need for this week, our gross requirements
are three hundred and fifty,
so if we subtact those out to what we have, what we plan on having and what we plan on using,
that leaves us fifty (50) units. Does that satisfy our safety stock?
What's our safety stock? Twenty five units.
So, yes that does satisfy
our safety stock.
Looking at week eight,
the last time bucket here,
at the end of week
seven, we have on hand
fifty (50) units.
We have no scheduled receipts, which leads us fifty (50) units.
How many do we plan on using?
Two hundred and fifty (250),
which means we're short two hundred (200) units... but ooh... take into consideration
your safety stock,
which means we're actually short two hundred and twenty five (225) units.
That satisfies our need or net requirement of two hundred and twenty five
(225) units.
Can you order two hundred and twenty five units? Nope!
You have to order minimum order of four hundred (400) units. Remember,
four hundred (400) is bigger than two hundred and twenty five (225),
three weeks in advance due to a three week lead time,
so four hundred (400) units will need to be ordered in week five.
If you order them in week five, plan on getting them in in week eight.
So, re-do week eight. We had on hand fifty (50),
we have scheduled receipts of four hundred (400)
that gives us four hundred and fifty (450), how many do we plan on using?
our gross requirements two hundred and fifty (250), that leaves us
two hundred left on hand, does that satisfy our safety stock at the end of this
time bucket? Sure does, because it only needs to be
twenty five (25) units.
That gives us a little bit more reality in ordering.
And ends on what we're going to do here. Now, there's a lot more information here
folks
uh... you have to take into consideration when plants will be closed,
and how you have to
change
what's what here.
uh...
You might know that your plant's going to be closed the week
of uh... between Christmas and New Years.
So, you have to order appropriately to have it in after New Year's before Christmas.
If your supplier is closed the week of Fourth of July, and you're not,
you have to vary how you're going to order things.
So, there's other things, reality, that has to be taken into consideration, but this
gives us a basic idea
of what's going on. Now, your book did to the lot for lot
ordering. I'd bring in this other reality, with safety stock minimum order
size, and then lot size after minimum.