COURSE : NDUSTR AL ENGINEERING LESSON: SHORTAGE OR BACK ORDER
ABOUT ME Graduated from NIT Nagpur in 2008 Cleared Engineering Services Examination (ESE-UPSC) Exam & Got the offer letter from most of the Maharatna and Navratna Companies * Cleared GATE Exam Rate, Review, Recommend, Share Follow me on Unacademy at: https://unacademy.in/user/harsh.t aggarwal
MODEL IV- SHORTAGE OR BACK ORDER MODEL This model is extension of Model but here shortages are allowed Planned shortages or back order is a situation in which a customer places order and finds that the item is out of stock and wait for the next shipment to arrive. Inv. Level Shortages may also have certain advantages: 1. Shortage increase the cycle time and thus lower the ordering cost by spending it over a long period. 2. Shortages result in a decreased net stock in inventory thus reducing holding cost.
MODEL IV - SHORTAGE OR BACK ORDER MODEL Cast Annual Holeli. )24 Op Cost= (a-s Leve 26. Max. Tnve Level tg oheve Time Buch osde cost o
QUESTION Demand per year 6000 units Unit CostRs 40/ Set-up Cost Rs 500/- Holding cost/year Rs 8- Shortage cost/unit/year Rs 20/- Find I. Optimal lot size 2. Optimal no. of units back ordered 3. Maximum Inventory level 4. Time between orders
SOLUTION Ch 23 1 24.69 3420 8+26 31.92.
Cleared UPSC ESE twice with Rank 63 and 90 in mechanical engg. Got 99 percentile in GATE. Cracked ONGC, BHEL,ISRO, SAIL, GAIL successfully