Q* = optimal order quantity
D = annual demand
S = ordering cost per order
H = annual holding (or carrying) cost per unit
Revenue management:
where:
Q* = the optimal number of full-price units
D = the expected demand for full price units
C
o
= cost per unit of overestimating D (discount price)
C
u
= cost per unit of underestimating D (full - discount price)
Flexible Flow Layout
where d
ij
= distance between departments i and j
w
ij
= importance
Capacity Planning
# resources required =
processing time required to meet demand for time period t
-----------------------------------------------------------------------------
processing time available per resource per time period t
(Time units should be consistent)
capacity utilization =
Actual units processed per time period
--------------------------------------------------------------------
Maximum possible units processed per time perio
o u
u
C C
C
Q D P
) (
*
n
i
n
j
ij ij
d w Minimize
1 1