Description
The PPT describes on Sunshine Industry.
Sunshine Industry
Reducing The Planning Cycle for RM & PM
Deliverables
To determine the safety stock for various materials (Raw material & Packing)
Design the ordering schedule for various materials
Monthly Safety Stock
? Segregated the consumption pattern for seasonal products as low demand and high demand months ? Defined the SD separately for low demand and high demand months ? Calculated different z value for different material at different service level ? Use the formula SS=z*SD*?l/30 , where l is the lead time of the material in days
Service Level % 99 95
Material cost as % of RM >5 <5
Fortnightly Planning
?Divided the monthly consumption into two halves to get the fortnightly consumption ?Repeat the same process as done for monthly consumption ?Use the formula: SS= SS=z*std. dev.*?l/15 ?The same process is repeated for PM ?In case of PM service level is assumed uniformly to be 95%
Raw Material : Safety Stock
2000000 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 0 2 4 6 8 10 12 14
Demand Material Material Code Description 15119349 Processed grain 15119349 Processed grain 15156728 Food additives 15130652 Dairy 15119331 Sweeteners 15119329 Oils & Fats Total SS Reduction in SS 1 Month Cycle 15 Day Cycle
High
843681 400584 28407 2106 6086 2434 1283298
Low
High Low 573168 86124 129186
118689 272143 19299 14122 268 826 330 1431 4134 1654 79126 9415 179 551 220 175615 -33.333
263423 871829 -32.063
Constraints:
EOQ model could not be applied due to non-availability of unit prices and ordering costs
doc_812357451.pptx
The PPT describes on Sunshine Industry.
Sunshine Industry
Reducing The Planning Cycle for RM & PM
Deliverables
To determine the safety stock for various materials (Raw material & Packing)
Design the ordering schedule for various materials
Monthly Safety Stock
? Segregated the consumption pattern for seasonal products as low demand and high demand months ? Defined the SD separately for low demand and high demand months ? Calculated different z value for different material at different service level ? Use the formula SS=z*SD*?l/30 , where l is the lead time of the material in days
Service Level % 99 95
Material cost as % of RM >5 <5
Fortnightly Planning
?Divided the monthly consumption into two halves to get the fortnightly consumption ?Repeat the same process as done for monthly consumption ?Use the formula: SS= SS=z*std. dev.*?l/15 ?The same process is repeated for PM ?In case of PM service level is assumed uniformly to be 95%
Raw Material : Safety Stock
2000000 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 0 2 4 6 8 10 12 14
Demand Material Material Code Description 15119349 Processed grain 15119349 Processed grain 15156728 Food additives 15130652 Dairy 15119331 Sweeteners 15119329 Oils & Fats Total SS Reduction in SS 1 Month Cycle 15 Day Cycle
High
843681 400584 28407 2106 6086 2434 1283298
Low
High Low 573168 86124 129186
118689 272143 19299 14122 268 826 330 1431 4134 1654 79126 9415 179 551 220 175615 -33.333
263423 871829 -32.063
Constraints:
EOQ model could not be applied due to non-availability of unit prices and ordering costs
doc_812357451.pptx