![]() ![]() of kanbans for WIP = (demand * lead time * safety factor)/container capacity where stable safety factor 1 to 1.1 variable safety factor 1.2 to 1. of kanbans for RM and FG including SS = (safety stock + demand * lead time)/container capacity Net requirements = gross requirements – scheduled receipts – available inventory ![]() ![]() Net income = gross margin – general and administrative expenses Manufacturing Lead Time = Queue time + Setup time + Run time + Wait time + Move time Mean Absolute Deviation MAD – sum of absolute deviations (actuals – forecast)/number of observations Inventory turns = annual cost of goods sold/average inventory in dollars Gross profit = revenue – cost of products sold ![]() The weighted average costs, using both FIFO and LIFO. At the end of an accounting period, let's assume you sold 100 total chairs. Gross margin = revenue – cost of goods sold The next month, you buy another 300 chairs for 20 per unit. USL = upper specification limit or upper tolerance and LSL = lower specification limit or lower toleranceĬost of distribution (total) = transportation costs + warehousing costs + materials handling costs + packaging costs + costs of carrying inventoryĬritical ratio = actual time remaining / lead time remaining = (Due Date – Today’s Date)/(Manufacturing Lead Time Left)ĭays of supply = inventory on hand / average daily usageĭeseasonalized demand = actual seasonal demand/seasonal indexĪ Annual Usage in units S Ordering cost in $ i Annual inventory carrying cost as decimal C unit costĮxponential smoothing = α * latest demand + (1 – α) * previous forecast α is smoothing constantĮfficiency = standard hours of work/hours actually worked * 100% of units * hours per unit)/ required quantity * standard hours to produce the productĬapability ratio C p = Specification range/Process capability = (USL – LSL)/6σ where If an Order has an "Alternate Usage" value of Yes, that usage will not be considered in the calculation of Average Daily Usage.Annual ordering cost calculation = (annual projected usage/lot size) * cost per orderĪnnual carrying cost calculation = (lot size/2) * unit cost * carrying rate (% of unit cost)Īvailable to Promise (ATP) for period 1: on hand – customer order due before next MPSĪvailable to Promise (ATP) for period 2: MPS scheduled receipt – customer orders due before next MPSĪverage inventory = order quantity/2 + safety stock = (starting inventory + ending inventory)/2Īverage inventory in transit = (transit time in days) * (annual demand)/365īacklog = total forecast + opening backlog – ending backlog orīacklog = previous backlog + input – outputīias = sum of deviations (actuals – forecast)/number of observationsĬarrying cost = capital (not product cost) + storage + risk costsĬapacity available = shifts per day * hours per day * days per period * productivity factorĬapacity demonstrated = historical output * standard hours to produceĬapacity required = Setup time + Run time (no. Orders have an attribute “Alternate Usage” (in the Details tab) that defaults to No. Infoplus re-calculates an Item’s Average Daily Usage and Overall Days On Hand each evening during off-peak hours. For any periods (months) that do not have any usage data, if provided estimated usage will be utilized (Estimated Annual Usage if provided can be viewed in the “Purchasing” tab when viewing an Item). An Item can be set up to create Low stock notices by filling in a value in the Lead Time on the Item definition.Īverage daily usage is calculated by looking back at the activity for the last 12 months and dividing that value by 365. Once the Average Daily Usage is calculated for an Item, the number of days can be projected how long the current On Hand amount will last. It is a critical consideration in the generation of Low stock notices that are based on an item's lead time. This is of primary importance when projecting how long a remaining inventory is likely to last and in placing an order to a vendor to resupply the warehouse. As Orders are fulfilled usage is noted based on the Order’s date (as opposed to the date the Order was fulfilled). The Average Daily Usage represents the amount of an item that is used on an average day. An important part of these projections is Average Daily Usage. Infoplus utilizes usage values for activity for projecting how long current on-hand supply will last and also issuing Low stock notices (These can be used to facilitate the acquisition of product from a supplier). Videos: Mobile Floor Apps Overview VideosĪverage Daily Usage Keep track of inventory movement by calculating your average daily use from data available on each individual item. Step 10: Warehouse Documents and Printing Step 3: Setting Up Shopping Carts, Integrations, and EDI ![]()
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