MGMT 333 Lecture Notes - Lecture 2: Critical Path Method, Shortage, Carrying Cost
18 Nov 2016
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Pert allows for variation based on a beta. We calc using ideal conditions, then the most un ideal time. Crashing: application of additional money to reduce amount of time the project takes to be completed. Base it on return on investment: calc crash cost per period. Inventory in transit: transit stock or pipe line inventory, function of distance and speed. Safety stock: protect against stock outs: excess demand, variation in supply. Anticipatory stock: build inventory in anticipation of unforeseen demand. !1: maintain independence of operation: so, if same amount of inventory goes to production and sa(cid:373)e de(cid:373)a(cid:374)d, the(cid:374) all is good, proble(cid:373) happe(cid:374)s (cid:449)he(cid:374) supplier does(cid:374)"t deli(cid:448)er o(cid:374) ti(cid:373)e or there is variation in demand. You must hold inventory to keep machines running. Cost of inventory, ordering, setting up, holding, shortages, Reorder point system: q model, orders same quantity of product, time between oders vary. Continuous review, falls below certain point, then an order is placed.
