BASICS OF SUPPLY CHAIN
FORMULAS-
Seasonal
Index
Period average demand
Average demand for all periods
seasonal demand (seasonal index) x (De-seasonalized demand)
(De-seasonalized demand : Average demand per period)
De-seasonalized
demand
Actual seasonal
Seasonal
Mean absolute deviation
Moving
average
(MAD) :
demand :
index
Annual demand forecast
Number of periods
Sum of absolute deviations :
Number of observations
Sum of period sales
Number of periods
Newforecast
(a) (latestdemand)
(Exponential Smoothing)
+ (l-a) (previousforecast)
Sum of absolute errors
Number of periods
,SE^S,SION
3: MASTER PLANNING
Level Production Plan
Total production needed
Total forecast demand
Production required each period
Ending inventory for period
1:
Ending inventory for period 2
- Opening inventory
Total production required
Number of periods
Opening inventory
+:
Ending inventory
+ Production -
Forecast Demand
Previous period's ending inventory
Forecast Demand
Production
Master Production Schedule
Projected available balance (PAB)
PAB for period
1:
PAB for period 2
Supply
Quantity on hand
onward
+ Scheduled
Prior period's PAB
Available to promise (ATP) for period
Demand
I :
MPS Receipt
Forecast Demand
Scheduled MpS Receipt
Forecast Demand
Quantity on hand The sum of customer orders due before
the next MPS scheduled receipt
ATP for period 2 onward MPS scheduled receipt
MPS scheduled receipt
The sum of customer orders due before the next
,s,s^s/o1v
Net
4: MATEfuIAL REQUTREMENTS hLANNING (MRp)
requirements
CAPACITY MANAGEMENT & PRODUCTION ACTIVITY
^SES^S1OAT5..
CONTROL
Available time (hrs)
Utilization
Gross requirements - Available inventory
Number of machines or workers
x Number of days per week
ffi
Efficiency
Standard hours of work
Hours of operation per day
t00%
nroduced X
100%
Hours actually worked
Rated caacity (std hrs)
(Calculated capacity)
Demonstrated capacity (std
(Measured capacity)
Available time
hrs) :
utilization (%)
or
Operation
time
Efficiency (%)
Average capacity
critical ratio (and the different ways of wording the
Time remaining
Work remaining
Actual time remaining
Lead time remaining
Due date - Present date
Lead time remaining
Setup time + Run time
and move times
same formula)
Time to due date remaining _
Expected elapse time to finish the job
er routing or work centre files) + Allow for queue, wait
Total
load :
time
Setup
Operation time per
order :
Manufacturing Lead
(Run time per piece
Order quantity
Time :
Queue
Backlog
Previous backlog
(Input / Output Control)
Cumulative Variance :
(Input / Output Control)
Input
cost :
Capital costs
Ordering
cost
Production control costs
Owners
Income
Liabilities
equity
Cost of goods sold
Run
+ Wait *
+ Actual -
Storage costs
Risk costs
Setup and teardown costs
Liabilities
Expenses
margin)
Revenue
Move
Planned
Owner's equity
Assets
Revenue
Gross profit (Gross
- Ouut
Carrying
Assets
Operation time per piece
Setup
Previous variance
x Order quanttty)
Total cost of goods sold
Lost capacity costs
Net income
rofit) :
Inventory turns
ratio :
Average inventory in
Days of
Gross
supply
profit - General
Annual cost of goods sold _
Average inventory in dollars
dollars
and administrative expenses
Annual cost of goods sold
Inventory turns ratio
Inventory on hand
Average daily usage
SESSION 7: ITEM INVENTORY MANAGEMENT _
Number of orders per
Average
year
inventory
Annual demand
Order quantity
Order quantitv
2
Annual cost of ordering
or
Annual cost of
:
:
carrying
Annual demand
Order quantity
Cost of ordering
Number of orders x Cost per order
order quantitv
x unit cost x
cost of carrying
Total inventory
cost
Annual ordering cost
Annual carrying cost
Economic order quantify
(EOO :
Where:
Order point
:
:
:
:
A
S
i
C
(OP) : DDLT +
Annual usage in units
Ordering costs in dollars
Annual inventory carrying costs (as a decimal)
Unit cost
SS
Demand during lead time
+ Safety stock
Periodic Review
Target level (T)
-: ,B"ffi:HJ"
Order
quantity
ABC classfication
o/o
review period
* Demand during the lead time) + safety stock
- Quantity on hand
Target level
of items (one unit's
worth)
100
Number of observations
80 120 Rule
ABC
Classification
%o
of
Vo
of
Impact
Items
20
B
C
30
50
15
80
5
,SES,SIOI
8: PURCHASING & PHYSICAL DISTRIBUTION
Physical dstribution
Total cost
Transportation costs
Dis tribution r e quirements
planning
Inventory carrying costs
Central supply's gross requirements
SESSION
The sum of all distribution centres planned order releases for the
Period
10: TIIEORY OF CONSTRAINTS
Throughput
Salesrevenue
Truevariablecosts
