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control models I
(Q, r) model
Learning objective
After this class the students should be able to:
G ( R) if demand is continous
P X R
G r if demand is discrete
Unlike the base stock model, the costs incurred in placing a purchase
order (for parts obtained from an outside supplier) or the costs
associated with setting up the production facility (for parts produced
internally) are significant enough to make one-at-a-time replenishment
impractical.
Thus, the maintenance manager must determine not only how much
stock to carry (as in the base stock model), but also how many to
produce/order at a time (as in the EOQ and newsboy models).
Assumptions
From a modeling perspective, the (Q, r) model is identical
to the base stock model, except that we will assume that
either
D Q D
Y Q, r A h r b n(r )
Q 2 Q
Where n(r) is the expected number of backorders that
will be placed during a cycle
Optimal replenishment quantity
The optimal
replenishment
quantity Q*, and 2 D( A bn(r )
Q
reorder point r*, h
can be found by
simultaneously
hQ
solving the G ( R) 1
following bD
equations:
Reflections
Each team is invited to analyze the
following insights, based on the
statistical model (10) minutes):