Formulas

Productivity = output/input. Keep track of units, e.g., dollars per worker, etc.
Total Productivity = (output produced)/(all inputs used)
Partial Productivity = (output produced)/(labor) or (output produced)/(any single input)
Multifactor Productivity = (output produced)/(sum of several inputs)
Total Revenue = (Selling Price) Q
Total Cost = (Fixed Cost) + (Unit Variable Cost) Q
Break-even quantity Q* = (Fixed Cost)/(Selling Price Unit Variable Cost)
Profit = Total Revenue Total Cost
Total Cost of Outsourcing :
TC Buy = FC Buy + (VC Buy Q )
Total Cost of Insourcing :
TC Make = FC Make + (VC Make Q )
Indifferen ce Point :
FC Buy + (VC Buy Q ) = FC Make + (VC Make Q )
Control Charts
X Chart Control Limits

R Chart Control Limits

CL = x

CL = R

UCL = x + A 2 R

UCL = D 4 R

LCL = x A 2 R

LCL = D 3 R

P Chart Control Limits

CL = p
UCL = p + z p

p =

p (1 - p)
n

LCL = p - z p
sample
size
2
3
4
5
6
7
8
9
10
11
12
13
14
15

A2
1.88
1.02
0.73
0.58
0.48
0.42
0.37
0.34
0.31
0.29
0.27
0.25
0.24
0.22

D3
0
0
0
0
0
0.08
0.14
0.18
0.22
0.26
0.28
0.31
0.33
0.35

D4
3.27
2.57
2.28
2.11
2.00
1.92
1.86
1.82
1.78
1.74
1.72
1.69
1.67
1.65
1

Process Capability Indices

Cp =

USL LSL
C pk = min
,

3
3

USL LSL
;
6

Reliability
Series: Rs = ( R1 ) ( R2 ) ( Rn )
Component with backup in parallel: Rs=Rprimary + Rbackup(1 - Rprimary)
JIT
Number of Kanbans or Containers
N=

D T + S
C

Forecasting
Weighted Moving Average
Ft +1 = C1 A1 + C 2 A2 + + C t At

where C t = 1
t

Exponential Smoothing
Ft+1 = At + (1- )Ft.
Linear Trend Line
Y = a + bX
where
b=

X Y nX Y
X n( X )
2

and

a = Y bX

Inventory
Inventory Turnover
Inventory Turnover =

annual cost of goods sold

average inventory in dollars

Weeks of Supply
Weeks of Supply =

average inventory in dollars

average weekly cost of good sold

Continuous Review: EOQ with safety stock

2 DS
H
R = dL + SS
SS = z dL

Q=

D Q
TC = S + H
Q 2
Periodic Review with safety stock
TI = d ( RP + L) + SS
SS = z RP + L

RP + L = t RP + L
q = TI OH

Table 1. Area under the Normal Curve from 0 to X

X
0.
0
0.
1
0.
2
0.
3
0.
4
0.
5
0.
6
0.
7
0.
8
0.
9
1.
0
1.
1
1.
2
1.
3
1.
4
1.
5
1.
6
1.
7
1.
8
1.
9
2.
0
2.
1
2.
2
2.
3
2.
4
2.
5

0.00
0.0000
0
0.0398
3
0.0792
6
0.1179
1
0.1554
2
0.1914
6
0.2257
5
0.2580
4
0.2881
4
0.3159
4
0.3413
4
0.3643
3
0.3849
3
0.4032
0
0.4192
4
0.4331
9
0.4452
0
0.4554
3
0.4640
7
0.4712
8
0.4772
5
0.4821
4
0.4861
0
0.4892
8
0.4918
0
0.4937
9

0.01
0.0039
9
0.0438
0
0.0831
7
0.1217
2
0.1591
0
0.1949
7
0.2290
7
0.2611
5
0.2910
3
0.3185
9
0.3437
5
0.3665
0
0.3868
6
0.4049
0
0.4207
3
0.4344
8
0.4463
0
0.4563
7
0.4648
5
0.4719
3
0.4777
8
0.4825
7
0.4864
5
0.4895
6
0.4920
2
0.4939
6

0.02
0.0079
8
0.0477
6
0.0870
6
0.1255
2
0.1627
6
0.1984
7
0.2323
7
0.2642
4
0.2938
9
0.3212
1
0.3461
4
0.3686
4
0.3887
7
0.4065
8
0.4222
0
0.4357
4
0.4473
8
0.4572
8
0.4656
2
0.4725
7
0.4783
1
0.4830
0
0.4867
9
0.4898
3
0.4922
4
0.4941
3

0.03
0.0119
7
0.0517
2
0.0909
5
0.1293
0
0.1664
0
0.2019
4
0.2356
5
0.2673
0
0.2967
3
0.3238
1
0.3484
9
0.3707
6
0.3906
5
0.4082
4
0.4236
4
0.4369
9
0.4484
5
0.4581
8
0.4663
8
0.4732
0
0.4788
2
0.4834
1
0.4871
3
0.4901
0
0.4924
5
0.4943
0

0.04
0.0159
5
0.0556
7
0.0948
3
0.1330
7
0.1700
3
0.2054
0
0.2389
1
0.2703
5
0.2995
5
0.3263
9
0.3508
3
0.3728
6
0.3925
1
0.4098
8
0.4250
7
0.4382
2
0.4495
0
0.4590
7
0.4671
2
0.4738
1
0.4793
2
0.4838
2
0.4874
5
0.4903
6
0.4926
6
0.4944
6

0.05
0.0199
4
0.0596
2
0.0987
1
0.1368
3
0.1736
4
0.2088
4
0.2421
5
0.2733
7
0.3023
4
0.3289
4
0.3531
4
0.3749
3
0.3943
5
0.4114
9
0.4264
7
0.4394
3
0.4505
3
0.4599
4
0.4678
4
0.4744
1
0.4798
2
0.4842
2
0.4877
8
0.4906
1
0.4928
6
0.4946
1

0.06
0.0239
2
0.0635
6
0.1025
7
0.1405
8
0.1772
4
0.2122
6
0.2453
7
0.2763
7
0.3051
1
0.3314
7
0.3554
3
0.3769
8
0.3961
7
0.4130
8
0.4278
5
0.4406
2
0.4515
4
0.4608
0
0.4685
6
0.4750
0
0.4803
0
0.4846
1
0.4880
9
0.4908
6
0.4930
5
0.4947
7

0.07
0.0279
0
0.0674
9
0.1064
2
0.1443
1
0.1808
2
0.2156
6
0.2485
7
0.2793
5
0.3078
5
0.3339
8
0.3576
9
0.3790
0
0.3979
6
0.4146
6
0.4292
2
0.4417
9
0.4525
4
0.4616
4
0.4692
6
0.4755
8
0.4807
7
0.4850
0
0.4884
0
0.4911
1
0.4932
4
0.4949
2

0.08
0.0318
8
0.0714
2
0.1102
6
0.1480
3
0.1843
9
0.2190
4
0.2517
5
0.2823
0
0.3105
7
0.3364
6
0.3599
3
0.3810
0
0.3997
3
0.4162
1
0.4305
6
0.4429
5
0.4535
2
0.4624
6
0.4699
5
0.4761
5
0.4812
4
0.4853
7
0.4887
0
0.4913
4
0.4934
3
0.4950
6

0.09
0.03586
0.07535
0.11409
0.15173
0.18793
0.22240
0.25490
0.28524
0.31327
0.33891
0.36214
0.38298
0.40147
0.41774
0.43189
0.44408
0.45449
0.46327
0.47062
0.47670
0.48169
0.48574
0.48899
0.49158
0.49361
0.49520

2.
6
2.
7
2.
8
2.
9
3.
0
3.
1
3.
2
3.
3
3.
4
3.
5
3.
6
3.
7
3.
8
3.
9
4.
0

0.4953
4
0.4965
3
0.4974
4
0.4981
3
0.4986
5
0.4990
3
0.4993
1
0.4995
2
0.4996
6
0.4997
7
0.4998
4
0.4998
9
0.4999
3
0.4999
5
0.4999
7

0.4954
7
0.4966
4
0.4975
2
0.4981
9
0.4986
9
0.4990
6
0.4993
4
0.4995
3
0.4996
8
0.4997
8
0.4998
5
0.4999
0
0.4999
3
0.4999
5
0.4999
7

0.4956
0
0.4967
4
0.4976
0
0.4982
5
0.4987
4
0.4991
0
0.4993
6
0.4995
5
0.4996
9
0.4997
8
0.4998
5
0.4999
0
0.4999
3
0.4999
6
0.4999
7

0.4957
3
0.4968
3
0.4976
7
0.4983
1
0.4987
8
0.4991
3
0.4993
8
0.4995
7
0.4997
0
0.4997
9
0.4998
6
0.4999
0
0.4999
4
0.4999
6
0.4999
7

0.4958
5
0.4969
3
0.4977
4
0.4983
6
0.4988
2
0.4991
6
0.4994
0
0.4995
8
0.4997
1
0.4998
0
0.4998
6
0.4999
1
0.4999
4
0.4999
6
0.4999
7

0.4959
8
0.4970
2
0.4978
1
0.4984
1
0.4988
6
0.4991
8
0.4994
2
0.4996
0
0.4997
2
0.4998
1
0.4998
7
0.4999
1
0.4999
4
0.4999
6
0.4999
7

0.4960
9
0.4971
1
0.4978
8
0.4984
6
0.4988
9
0.4992
1
0.4994
4
0.4996
1
0.4997
3
0.4998
1
0.4998
7
0.4999
2
0.4999
4
0.4999
6
0.4999
8

0.4962
1
0.4972
0
0.4979
5
0.4985
1
0.4989
3
0.4992
4
0.4994
6
0.4996
2
0.4997
4
0.4998
2
0.4998
8
0.4999
2
0.4999
5
0.4999
6
0.4999
8

0.4963
2
0.4972
8
0.4980
1
0.4985
6
0.4989
6
0.4992
6
0.4994
8
0.4996
4
0.4997
5
0.4998
3
0.4998
8
0.4999
2
0.4999
5
0.4999
7
0.4999
8

0.49643
0.49736
0.49807
0.49861
0.49900
0.49929
0.49950
0.49965
0.49976
0.49983
0.49989
0.49992
0.49995
0.49997
0.49998