Solved – Inventory control – first order quantity of periodic order quantities model

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I Have read "Manufacturing Planning and Control for Supply Chain Management 6th Edition" by F.Robert Jacobs. I found the problem on the Periodic Order Quantities (POQ).
As I know POQ calculation is after calculate the Economic Order Quantity (EOQ).

In the book contained an example problem :

Data

To calculate EOQ from the above data using the following formula :
begin{align}
EOQ= sqrt{frac{2C_Pbar{D}}{ C_H }}
end{align}

And the results of EOQ is 166

For POQ using the formula :

begin{align}
POQ= frac{EOQ}{bar{D}}
end{align}

And the result of POQ is 1.8

From the above data it can be said that ordering interval is 2 weeks, and this is the data from 12 period (12 weeks) :

POQ

Question : Can someone tell me, Where the amount of the first order obtained ? From 1st week plus 2nd Weeks (10+10) ? If I have estimation (requirement) for 13th weeks is 70, how much to order ? so for 14th weeks I don't need to order again.

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Best Answer

In POQ, Optimal Order Cycle time is found by the dividing EOQ by average annual demand. If it is a fractional value, convert it to nearest higher integer. This time period is called POQ. Now for every POQ we need to order enough to satisfy the demand of that whole period. Like in the example you mentioned POQ is 1.8 which is rounded to 2. So our POQ is now 2 weeks. Now we have to place that much order which we need to satisfy demand for 2 weeks. Here for first week demand is 10 and for next week also demand is 10. So total demand for POQ, that is 2 weeks is 20. Similarly for next periods. For the next part of your question, if I have requirement of 70 in 13 week then place order which will be sum of requirement both of 13 and 14 weeks.

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Solved – Inventory control – first order quantity of periodic order quantities model

by

I Have read "Manufacturing Planning and Control for Supply Chain Management 6th Edition" by F.Robert Jacobs. I found the problem on the Periodic Order Quantities (POQ).
As I know POQ calculation is after calculate the Economic Order Quantity (EOQ).

In the book contained an example problem :

Data

To calculate EOQ from the above data using the following formula :
begin{align}
EOQ= sqrt{frac{2C_Pbar{D}}{ C_H }}
end{align}

And the results of EOQ is 166

For POQ using the formula :

begin{align}
POQ= frac{EOQ}{bar{D}}
end{align}

And the result of POQ is 1.8

From the above data it can be said that ordering interval is 2 weeks, and this is the data from 12 period (12 weeks) :

POQ

Question : Can someone tell me, Where the amount of the first order obtained ? From 1st week plus 2nd Weeks (10+10) ? If I have estimation (requirement) for 13th weeks is 70, how much to order ? so for 14th weeks I don't need to order again.

Best Answer

In POQ, Optimal Order Cycle time is found by the dividing EOQ by average annual demand. If it is a fractional value, convert it to nearest higher integer. This time period is called POQ. Now for every POQ we need to order enough to satisfy the demand of that whole period. Like in the example you mentioned POQ is 1.8 which is rounded to 2. So our POQ is now 2 weeks. Now we have to place that much order which we need to satisfy demand for 2 weeks. Here for first week demand is 10 and for next week also demand is 10. So total demand for POQ, that is 2 weeks is 20. Similarly for next periods. For the next part of your question, if I have requirement of 70 in 13 week then place order which will be sum of requirement both of 13 and 14 weeks.

Similar Posts:

Rate this post

Leave a Comment