存貨管理 ( Inventory Management)

1. 存貨管理 (Inventory Management) • Introduction Inventories are materials and supplies that a business or institution carries either for sale or to provide inputs or supplies to the production process. Inventories 原物料 (raw material)，物料 (supplies) ， 半成品 (WIP) ，完成品 (finished goods)

2. 存貨管理 (Inventory Management) Overall Inventory Production Planning End Items Inventory Master Planning Material Requirement Planning Component Parts and Raw Material

3. 存貨管理 (Inventory Management) • Inventory and the Flow of Material Maintenance, Repair, and Operational Supplies (MROs) Distribution Inventory

4. 存貨管理 (Inventory Management) • Function of Inventories Anticipation Inventory: These inventories are built up in anticipation of future demand Fluctuation Inventory: Inventory is held to cover random unpredictable fluctuation in supply and demand or lead time Lot-Size Inventory: Items purchased or manufactured in quantities greater than needed immediately create lot-size inventories Transportation Inventory: These inventories exist because of the time needed to move goods from one location to another.

5. 存貨管理 (Inventory Management) • Objectives of Inventory Management 減少存貨投資 資金靈活運用 開工水準安定化 減少存貨成本 防止生產遲延及缺料

6. 存貨管理 (Inventory Management) • Inventory Costs Item Cost: direct material, direct labor, factory overhead transportation, insurance Carrying Cost: capital cost, storage cost, risk cost Ordering Cost: 請購，審核，郵寄，跟催，比價 Stockout Cost: back-order, lost sales, lost customers

7. 存貨管理 (Inventory Management) • ABC Inventory Control Control of inventory is exercised by controlling individual items called stock-keeping units (SKUs). In controlling inventory, four questions must be answered: • What is the importance of the inventory item? • How are they to be controlled? • How much should be ordered at one time? • When should an order be placed?

8. 存貨管理 (Inventory Management) • ABC Inventory Control The ABC principle is (Pareto’s Law) based on the observation that a small number of items often dominate the results achieved in any situation. As applied to inventories, it is usually found that the relationship between the percentage of items and the percentage of annual dollar usage follows a pattern in which A About 20% of the items account for about 80% of the dollar usage B About 30% of the items account for about 15% of the dollar usage C About 50% of the items account for about 5% of the dollar usage

9. 存貨管理 (Inventory Management) • Step in Making an ABC Analysis Step 1: Establish the item characteristics that influence the results of inventory management. This is usually annual dollar usage but may be other criteria, such as scarcity of material. Step2 : Classify items into groups based on the established criteria. Step3 : Apply a degree of control in proportion to the importance of the group. • Have plenty of low-value items • Use the money and control effort saved to reduce the inventory • of high-value items

10. 存貨管理 (Inventory Management) A 料件 1. 經常對需求預測與預測方法作評估 2. 經常週期性進行嚴格的盤點 3. 每日更新記錄 4. 經常對需求之需要、訂購量與安全存量進行檢視 5.嚴密跟催以縮短前置時間 B 料件 與 A 料件相同，但管制頻率較低 C 料件 1. 基本原則在保有此種存貨 2. 非經常性地進行較不嚴格之盤點

11. 存貨管理 (Inventory Management) • Lot Size Decision Rules Lot for Lot - To order exactly what is needed (no more no less). The order quantity changes whenever requirements change. Fixed-order quantity - The number of units to be ordered each time is fixed. The quantity is usually arbitrary. Min-Max System - An order is placed when the quantity available falls below the order point. Period-Order quantity - Order enough to satisfy future demand for a given period of time. Costs- Minimize the sum of ordering cost and carrying cost.

12. 存貨管理 (Inventory Management) • Economic-Order Quantity (EOQ) Assumptions 1. Demand is relatively constant and is known. 2. The item is produced or purchased in lots or batches and not continuously. 3. Order preparation costs, inventory-carrying costs, and lead times are constant and known. 4. Replacement occurs all at once.

13. 存貨管理 (Inventory Management) • Development of the EOQ Formula • Average inventory = Order Quantity/2 • Number of order per year = annual demand/order quantity Units In Stock Q=Lot Size Time

14. 存貨管理 (Inventory Management) • Development of the EOQ Formula Relevant costs • Annual cost of placing orders • Annual cost of carrying inventory Let A = annual usage in units S = ordering cost in dollars per order i = annual carrying cost rate as a decimal of a percentage c = unit cost in dollars Q = order quantity in units

15. 存貨管理 (Inventory Management) • Development of the EOQ Formula

16. 存貨管理 (Inventory Management) • Development of the EOQ Formula Cost in Dollars Total Cost Carrying Cost Ordering Cost Lot Size

17. 存貨管理 (Inventory Management) • Development of the EOQ Formula

18. 存貨管理 (Inventory Management) • How to Reduce Lot Size Order Cost decrease Unit Cost Increase

19. 存貨管理 (Inventory Management) • Monetary Unit Lot Size (貨幣單位批量) - EOQ in Dollar AD = annual usage in dollars S = ordering costs in dollars i = carrying cost rate as a decimal of a percent

20. 存貨管理 (Inventory Management) When to place a replacement order? Order Point System Independent Demand Periodic Review System Material Requirement Planning Dependent Demand

21. 存貨管理 (Inventory Management) • Order Point System Units in Stock Q Order Point Safety Stock Lead Time Note: Q is usually precalculated and based on economic-order quantity.

22. 存貨管理 (Inventory Management) • Order Point System When variability is present in demand or lead time, the possibility that actual demand will exceed expected demand is created. Consequently, it becomes necessary to carry additional inventory, called Safety Stock (安全庫存) Determine the order point depends on the demand during the lead time and the safety stock OP=DDLT+SS Where OP=Order point DDLT=demand during the lead time SS=safety stock Average inventory = order quantity / 2 + safety stock

23. 存貨管理 (Inventory Management) • Order Point System The amount of safety stock that is appropriate for a given situation depends on the following factors 1. The average demand rate and average lead time 2. Demand and lead time variability 3. The desired service level Order cycle service level can be defined as the probability that demand will not exceed supply during lead time. Hence, a service level of 95% implies a probability of 95% that demand will not exceed supply during lead time Service level = 100 percent - Stock-out risk

24. 存貨管理 (Inventory Management) • Order Point System Quantity Maximum probable demand during lead time Expected demand during lead time Order Point Safety Stock Time Lead Time

25. 存貨管理 (Inventory Management) • Order Point System Risk of a Stock-out Service Level (Probability of no stock out) Expected Demand Order Point Safety Stock 0 z Z-scale

26. 存貨管理 (Inventory Management) • Order Point System Where z = number of standard deviation = The standard deviation of lead time demand The models generally assume that any variability in demand rate or lead time can be adequately described by a normal distribution.

27. 存貨管理 (Inventory Management) • Order Point System When data on lead time demand are not readily available, the previous formula cannot be used. , and the reorder If only demand is variable, then point is where

28. 存貨管理 (Inventory Management) • Order Point System If only lead time is variable, then , and the reorder point is where

29. 存貨管理 (Inventory Management) • Order Point System If both demand and lead time are variable, then , and the reorder point is

30. 存貨管理 (Inventory Management) • Order Point System - An Alternative Way 4% 4% 1% 1% 30% 30% 15% 15% -2 -1 0 +1 +2 -3 +3 MAD

31. 存貨管理 (Inventory Management) • Order Point System - An Alternative Way The actual demand will be within 1 MAD of the forecast average about 60% of the time. The actual demand will be within 2 MAD of the forecast average about 90% of the time. The actua demand will be within 3 MAD of the forecast average about 98% of the time.

32. 存貨管理 (Inventory Management) • Order Point System - An Alternative Way Safety Stock = MAD  safety factor

33. 存貨管理 (Inventory Management) • Order Point System - Determining When the Order • Point is Reached Two-Bin System Perpetual Inventory Record System

34. 存貨管理 (Inventory Management) • Order Point System - Perpetual Inventory Record System Permanent Information : Part Number Storage Location Order Point Order Quantity Lead Time Safety Stock Suppliers Variable Information : Quantities ordered: dates, order number, and quantity Quantities received: dates, order number, and quantity Quantities issued Balance on hand Allocated Available balance

35. 存貨管理 (Inventory Management) • Order Point System - Perpetual Inventory Record System Ex:

36. 存貨管理 (Inventory Management) • Noninstantaneous Receipt Q=lot size Qm Tp Td

37. 存貨管理 (Inventory Management) • Noninstantaneous Receipt Where A, S, c, and i have the same meanings as before and d = usage rate p = production rate .

38. 存貨管理 (Inventory Management) • Quantity Discount Example: An item has an annual demand of 25000 units, a unit cost of $10, an order preparation cost of $10, and a carrying cost of 20%. It is ordered on the basis of an EOQ, but the supplier has offered a discount of 2% on orders of $10000. Should the offer be accepted?

39. 存貨管理 (Inventory Management) • Use of EOQ When Costs are Not Known Example: Suppose there were a family of items for which the decision rule was to order each item four times a year. Since the cost of ordering and the cost of carrying inventory are not known, ordering four times a year is not based on an EOQ. Can we come up with a better decision rule even if the EOQ cannot be calculated? Item Annual Usage Orders per Year 10,000 400 144 4 4 4 A B C

40. 存貨管理 (Inventory Management) • Use of EOQ When Costs are Not Known Assume S and i are the same for all items, the ratio of 2S i must be the same for all items in the family.

41. 存貨管理 (Inventory Management) • Period Order Quantity (POQ) The economic-order quantity attempts to minimize the total cost of ordering and carrying inventory and is based on the assumption that demand is uniform. Often demand is not uniform, particularly in material requirement planning, and using the EOQ does not produce a minimum cost. The period-order quantity lot-size rule is based on the same theory as the economic-order quantity. It uses the EOQ formula to calculate an economic time between orders.

42. 存貨管理 (Inventory Management) • Period Order Quantity (POQ) Example: Given the following MRP record and an EOQ of 250 units, calculate the planned order receipts using the economic-order quantity. Next, calculate the period-order quantities and the planned order receipts. In both cases, calculate the ending inventory and the total inventory carried over the ten weeks.

43. 存貨管理 (Inventory Management) • Periodic Review System The period review system is useful for the following: Where there are many small issues from inventory, and posting transactions to inventory records are very expensive. Where ordering cost are small. This occurs when many different items are ordered from one source. Where many items are ordered together to make up a production run or fill a truckload.

44. 存貨管理 (Inventory Management) • Periodic Review System Using the periodic review system, the quantity on hand of a particular item is determined at specified, fixed time intervals, and an order is placed. Q2 The review interval (t1,t2, and t3) are equal and that Q1, Q2, and Q3 are not necessary the same. Q3 Q1 t1 t2 t3 R1 R2 R3 R4 Review period

45. 存貨管理 (Inventory Management) • Periodic Review System T = target (maximum) inventory level D = demand per unit of time L = lead time duration R = review period duration SS = safety stock Note: The quantity equal to the demand during the lead time plus the demand during the review period plus safety stock is called the target level or maximum-level inventory.