I made short presentation about what is logistics and how does it affect on your business and it’s finances.
Variability can be controlled with different kind of combinations. Example if machine receives its raw material from multiple sources the variability of this combined feed will be close to value CV = 1. Despite if sources are LV or HV machines, their summarized feed tend to be medium variable.
We have now solved the optimal order quantity. When is this order supposed to do? Can we end up in the situation that we have to sell zero stock? In this post we will figure out what is safety stock and why you should have it.
EOQ-function was first created for manufacturing industry. It was originally founded by Ford. W. Harris in 1913. He discovered that when manufacturing line was set from one product to another there will always be condemned production and time is spent to make new settings. On the other hand bigger manufacturing batches need more capital and storage room.