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This worksheet calculates the value of
Mean demand for each color=
1000
example in Cell K24. Cell E22 contains
Standard Deviation of Demand =
500
postponement. Cell K22 contains the ex
Cost per unit without potsponement, c =
$
20.00
postponement. Change the SD of dema
$
22.00
Cost per unit with postponement, c =
the value of postponement (Cell K24). C
postponement in Cell E6 to see its impa
Retail price, p =
$
50.00
Change the correlation coefficient in Ce
Salvage Value, s =
$
10.00
value of postponement.
Correlation Coefficient
$
Product Colors/Styles
4
No Postponement
With Postponement
$
10.00
Aggregate mean demand
Cost of overstocking per unit, Co =
Cost of understocking per unit, Cu =
$
30.00
Standard Deviation of Dema
Expected overstock units (eqn 13.4) =
412 Cost of overstocking per uni
Expected understock units (eqn 13.5) =
75 Cost of understocking per u
Optimal Order quanity, O* (eqn 13.2) =
1,337
Expected overstock units (e
Optimal cycle service level, CSL* (eqn 13.1
0.75
Expected understock units (
Expected Profit (eqn 13.3) =
#NAME? Total Expected Cost of Over
Total Expected Cost of Overstock Units
$
16,473
Total Expected Cost of Unde
Total Expected Cost of Understock Units
$
8,949
Optimal cycle service level,
Total Order Quantity
5,349
Optimal Order quanity, O* (e
Total Expected Profit
#NAME? Expected Profit (eqn 13.3)
Value of Postponement
Postponement
gate mean demand
ard Deviation of Demand
f overstocking per unit, Co =
f understocking per unit, Cu =
ed overstock units (eqn 13.4) =
ed understock units (eqn 13.5) =
xpected Cost of Overstock Units
xpected Cost of Understock Units
al cycle service level, CSL* (eqn 13.1)=
al Order quanity, O* (eqn 13.2) =
ted Profit (eqn 13.3) =
of Postponement
$
$
$
$
4,000
1,000
12.00
28.00
715
190
8,577
5,330
0.70
4,524
#NAME?
#NAME?
This
800 worksheet calculates the value of
is a diminant product (red in our exam
200
demand in Cell E3 and SD of demand
200
of
values in Cells E3:F4 (Cells E5:F6 wi
complete
postponement is valuable.
200
Complete Postponement
Aggregate mean demand
Standard Deviation of Deman
Cost of overstocking per unit,
Cost of understocking per unit
Expected overstock units (eqn
Expected understock units (eq
Optimal cycle service level, CS
Optimal Order quanity, O* (eq
Expected Profit (eqn 13.3) =
Value of Postponement
e Postponement
e mean demand
Deviation of Demand
verstocking per unit, Co =
nderstocking per unit, Cu =
d overstock units (eqn 13.4) =
d understock units (eqn 13.5) =
cycle service level, CSL* (eqn 13.1)=
Order quanity, O* (eqn 13.2) =
d Profit (eqn 13.3) =
Postponement
4,000
872
$
12.00
$
28.00
623
166
0.70
4,457
#NAME?
#NAME?
ete Postponement
ate mean demand
rd Deviation of Demand
overstocking per unit, Co =
understocking per unit, Cu =
ed overstock units (eqn 13.4) =
ed understock units (eqn 13.5) =
l cycle service level, CSL* (eqn 13.1)=
l Order quanity, O* (eqn 13.2) =
ed Profit (eqn 13.3) =
of Complete Postponement
4,000
872
$
12.00
$
28.00
623
166
0.70
4,457
#NAME?
#NAME?
ed Postponement
#NAME?