FORMULAS

1) PRODUCTIVITY = OUTPUT / INPUT

2) BREAK EVEN POINT Q = F / (P-C)
Where F Fixed cost
P per unit profit
C per unit variable cost
3) TC1 = TC2
(F1 + Q * C1 ) = (F2 + Q * C2 )
Q = (F1 F2) / (C2 C1)

4) The simple exponential smoothing model is of the form:

Ft = Ft-1 + ( At-1 - Ft-1)
where
Ft = forecast of the time series for period t
At-1 = actual value of the time series in period t-1
= smoothing constant ( 0 < < 1)
5) A least squares line is described in terms of:
Y a bX

where Y - dependent variable

X - Independent variable
a - constant term
b - slope term.
a = ( X2 ) ( Y) - ( X) ( XY)
------------------------------------((n ( X2) ) - ( X)2 )
b = n ( XY) - ( X) ( Y)
---------------------------((n ( X2)) - ( X)2 )

Formulas
1) Total inventory costs = Holding cost (carrying) + Ordering costs
(setup)
TIC = (Q/2)*(H) + (D/Q)*(S)
where: D = annual demand; H = holding cost; S = ordering and setup cost; Q
= lot size.
EOQ = sqrt ((2*D* S)/H)
2) EOQ model for quantity discounts
EOQ = sqrt ((2*D* S)/H)
Total Annual Cost = Total holding cost + total annual cost + Total
Purchase price
TAC = (Q/2)*(H) + (D/Q)*(S) + P * D
where
D Annual demand
S Setup cost (Ordering cost)
H Holding cost (Carrying cost)
P Purchase cost
Q EOQ quantity
3)
The following notations will be used:
u - demand rate when demand is constant
u-bar - average demand rate when demand can vary
u standard deviation of demand when demand varies
LT lead time when lead time is constant
LT-bar - average lead time when lead time can vary
LT standard deviation of lead time when lead time varies
In general, ROP = expected demand during lead time + safety stock
= usage rate * (lead time) + safety stock
Constant demand and constant lead time:
ROP = usage rate * lead time = u * LT
Variable demand and constant lead time:
ROP = (u-bar)*LT + Z* sqrt(LT)*(u)
Constant demand and Variable lead time:
ROP = u *(LT-bar) + Z*(u)*(LT)

MRP

Inventory at the end of time period t = Inventory carried over from previous
period + Scheduled receipts for that period + Planned receipts for that
period Gross requirements for that period.
FORMULAS
Model Single Channel

Mean number of arrivals per time period

Mean number of units served per time period

Ls

Average number of units (customers) in the system (waiting and being

served)

/(-)

=
Ws

=
=

Lq

Average time a unit spends in the system (waiting time plus service time)
1/

=
=

Wq

=
=

(-)
Average number of units waiting in the queue

(-)

Average time a unit spends waiting in the queue

(-)

=
=

Utilization factor for the system

/

P0

=
=

Probability of 0 units in the system (that is, the service unit is idle)
1

Pn > k

Probability of more than k units in the system, where n is the number

of units in the system

() (K+1)

Model with Constant service

Average length of queue = Lq =
Average waiting time

/ (2 (-))

= Wq = / (2 (-))

Average number of customers in the system

Average time in the system

= Ws = Ls /

= L s = L q + ( / )

Crashing cost per time period = ((CC-NC)/(NT-CT))

CC Crash cost; NC Normal cost; NT Normal time; CT Crash time

Expected Project completion time = (a + 4m + b)/6

Activity Variance = ((b-a)/6)2
a Most Optimistic time
b Most Pessimistic time
m Most likely time