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  • Spare Part Inventory Analysis Report: Normal Distribution-Curve EOQ Model

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    Ranjan Shankar
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    The report analyzes the spare part inventory of an extinguisher with material number 000151522 at a mine site over a 3 year period. It shows the annual consumption is 1 unit with an average reorder point of 2 units and no maximum stock level. The unit price is CAD 2,146.61 with a planned delivery lead time of 5 days and GR processing lead time of 3 days. A graph shows the material consumption from 2015 to present. Calculations determine the economic order quantity, total holding and ordering costs, and total cost based on annual demand of 1 unit, 95% service level, and other factors. Safety stock, reorder point, and other key parameters are also presented.

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    000151522

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    The report analyzes the spare part inventory of an extinguisher with material number 000151522 at a mine site over a 3 year period. It shows the annual consumption is 1 unit with an average reorder point of 2 units and no maximum stock level. The unit price is CAD 2,146.61 with a planned delivery lead time of 5 days and GR processing lead time of 3 days. A graph shows the material consumption from 2015 to present. Calculations determine the economic order quantity, total holding and ordering costs, and total cost based on annual demand of 1 unit, 95% service level, and other factors. Safety stock, reorder point, and other key parameters are also presented.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    37 views1 page

    Spare Part Inventory Analysis Report: Normal Distribution-Curve EOQ Model

    Uploaded by

    Ranjan Shankar
    The report analyzes the spare part inventory of an extinguisher with material number 000151522 at a mine site over a 3 year period. It shows the annual consumption is 1 unit with an average reorder point of 2 units and no maximum stock level. The unit price is CAD 2,146.61 with a planned delivery lead time of 5 days and GR processing lead time of 3 days. A graph shows the material consumption from 2015 to present. Calculations determine the economic order quantity, total holding and ordering costs, and total cost based on annual demand of 1 unit, 95% service level, and other factors. Safety stock, reorder point, and other key parameters are also presented.

    Copyright:

    © All Rights Reserved
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    of 1

    Spare Part Inventory Analysis Report

    3Yrs
    Annual
    Cons.

    StLoc.
    1
    Material #

    000151522

    Material Description

    EXTINGUISHER,SINGLE,RA29190,ANSUL

    Unit Price

    CAD

    Plant

    0611

    CR-MINE

    Average
    Annual Reorder Point
    Cons.

    Maximum
    SoH
    Level

    2,146.61

    Lead Time in Days


    Planned Delivery Lead
    Time

    GR Processing
    Lead Time

    Material Consumption for Past 5 Years or 60 Months


    000151522

    2.5
    2
    2
    1.5
    1
    0.5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
    0 0 0 0
    0
    -0.52015-12 2015-09 2015-06 2015-03 2014-12 2014-09 2014-06 2014-03 2013-12 2013-09 2013-06
    -1
    -1.5

    1
    0 0 0 0 0 0 0 0 0 0 0
    2013-03

    2012-12

    2012-09

    2012-06

    -1

    0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
    2012-03

    2011-12

    2011-09

    2011-06

    2011-03

    -1

    Annual demand

    Service Level

    95%

    Service Level 95%

    Per Order cost

    Fixed Cost

    SL Factor

    1.64

    Risk of a StockOut 5%

    Holding Cost /Unit/Year

    25 % of the Unit Price

    Economic Order Quantity

    Normal Distribution- Curve

    EOQ Model

    20

    95%
    Service Level
    95%

    68%

    EOQ
    Total Holding Cost
    Total Ordering Cost
    Total Cost

    18
    16

    Risk of a
    StockOut 5%

    14

    Cost ($)

    12
    10
    8
    6
    4

    $0.0

    2
    0
    0.1%

    0.6%

    2.3%

    6.7%

    15.9%

    30.9%

    50.0%

    69.1%

    84.1%

    93.3%

    97.7%

    99.4%

    99.9%

    50

    100

    150

    Percentile

    200

    250

    300

    350

    Order Quantity

    Safety Stock (SS)

    Demand During Lead Time

    Reorder Point (RoP)

    Economic Order Qty (EoQ)

    EOQ = Economic order quantity


    IOC
    Co = Cost of procurement
    Stock On Hand
    EXISTING MIN
    S = Annual usage
    Cm = Annual carrying costs
    1
    0
    U = Cost of the item.
    DDL = Demand during Lead Time or working stock.
    CAD
    2,146.61 CAD
    S = Annual usage of the item (demand)
    LT = Lead time in days.
    Movement Type
    SS = Safety stock.
    Ranking
    SD = Standard deviation of monthly demand.
    SL = Standard deviation of Lead-time.
    Lead Time Ranking
    SL Factor = The normal distribution value which yields the desired service level factor

    Unit Cost Ranking

    Recommended MIN_MAX

    IOC
    EXISTING MAX

    SKF MIN

    SKF MAX

    CAD

    CAD

    CAD

    SKF Remarks

    NO STOCK SUGGESTED,
    EXISTING MIN-MAX RETAINED

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