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Safety Inventory - Reading Material 1

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41 views4 pages

Safety Inventory - Reading Material 1

Uploaded by

sumit.kumardas23
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

BASIS FOR

DISCRETE VARIABLE CONTINUOUS VARIABLE


COMPARISON

Meaning Discrete variable refers to the Continuous variable alludes to the a


variable that assumes a finite variable which assumes infinite number
number of isolated values. of different values.

Range of specified Complete Incomplete


number

Values Values are obtained by counting. Values are obtained by measuring.

Classification Non-overlapping Overlapping

Assumes Distinct or separate values. Any value between the two values.

Represented by Isolated points Connected points

Source: [Link]

DISCRETE VARIABLE (figure)

CONTINUOUS VARIABLE (figure)

Source: [Link]
Basic definitions and assumptions of safety inventory
 If X is a continuous random variable, then the pdf of X is a function, f ( x) , such that for
any two numbers, a and b with a  b :
b
P (a  X  b)   f ( x)dx.
a

That is, the probability that X takes on a value in the interval  a, b  is the area under the
density function from a to b, as shown above.

 The CDF F ( x) can be defined as the probability of a random variable X , that can be less
than or equal to x . It can be expressed in the following manner.
x
F ( x)  P( X  x)   f ( x)dx.
0

Assumption: random variable X takes only positive values.

Problem-10
Evaluating Cycle Service Level (CSL) Given a Replenishment Policy
DL =Mean demand during lead time
σL = Standard deviation of demand during lead time
L = Lead time (in weeks)

CSL  P ( Demand during leadtime  ROP )


ROP
 CSL  
0
f ( x )dx

 CSL  F ( ROP )
 CSL  F ( ROP, DL ,  L )
 CSL  F ( ROP,  D  L  , L D )
 CSL  NORMDIST ( ROP,  D  L  , L D )
Problem-11
Evaluating Required Safety Inventory Given a Desired Cycle Service Level
DL =Mean demand during lead time
σL = Standard deviation of demand during lead time
L = Lead time (in weeks)
Approach 1 (if mean demand is given)
CSL  P ( Demand during leadtime  ROP )
ROP
 CSL  
0
f ( x)dx

 CSL  F ( ROP )
 ROP  F 1 (CSL)
 DL  SS  F 1 (CSL )
 SS  F 1 (CSL)  DL
 SS  NORMINV (CSL,  D  L  , L D )   D  L 
Approach 2 (if mean demand is not given given)
CSL  P ( Demand during leadtime  ROP )
  X  DL   ROP  DL 
 CSL  P     

 L   L 
 ROP  DL 
 
 L 
 CSL  
0
f S ( x)dx

 ROP  DL 
 CSL  FS  
 L 
 SS 
 CSL  FS  
L 
 SS  FS 1 (CSL)   L
 SS  NORMSINV (CSL)  L D

1  x 
2
  
2  
f ( x)  e
 x 
Note : Let , z   .
  
 z 2

Then, f ( x)  e 2
Problem 13
Impact of Supply Uncertainty on Safety Inventory

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