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N X
N ( X X )2
Given a population { X1 , X2 , . . . , X N }, Mean: X = i=1 i ; Variance: Var( X ) = i=1 i
.
N
N
Standard deviation for the population: = Var( X ). Coefficient of Variation for the population: CV = / X.
For a normal random variable N (, 2 ), ( N (, 2 ) )/ = N (0, 1) is the standard normal random variable. If
we sum L many independent normal random variables N (, 2 ), the sum is a normal random variable N ( L, L2 ).
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
0.54 0.58 0.62 0.66 0.69 0.73 0.76 0.79 0.82 0.84 0.86 0.88 0.9 0.919
0.35 0.31 0.27 0.23 0.20 0.17 0.14 0.12 0.10 0.08 0.07 0.06 0.05 0.037
1.5
1.6
1.65
1.7
1.8
1.9
2.0
2.1
2.2
2.3
2.4
2.5
2.6
0.933 0.945 0.950 0.955 0.964 0.971 0.977 0.982 0.986 0.989 0.992 0.994 0.995
0.029 0.023 0.020 0.018 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.001
COGS
1
=
.
Flow time
Value of the Inventory
Annual Inventory Cost
.
Number of Inventory Turns Per Annum
Labor content
.
Labor content + Total idle time
Flow Rate
.
Process Capacity
Capacity Requested by Demand
Available Capacity
Littles Law:
Batch Size
.
Set-up time + Batch-size*Time per unit
Flow Rate * Setup Time
.
1-Flow Rate*Time per Unit
Return
Return
Revenue
=
;
Invested Capital
Revenue Invested Capital
Return
Revenue - Fixed costs - Flow rate*Variable costs
=
,
Revenue
Revenue
Revenue
Flow Rate*Price
=
.
Invested Capital
Invested Capital
EPQ( P) =
KR
Q
|{z}
2KR
(1 R/P)h
EOQ =
2KR
=
h
lim
KR
Q
|{z}
Set up cost per time
2KR
= EPQ( P = )
(1 R/P)h
With P = and Q = EOQ, the total cost C ( Q) per time becomes C ( Q = EOQ; P = ) =
2KRh.
p
.
am
T = Tq + p.
Then, we have:
Tq =
(
)(
)
CVa2 + CVp2
u 2(m+1)1
.
m
1u
2
(p)
Ip = m u.
I = Iq + I p .
Iq = (1/a) Tq .
I = (1/a)( Tq + p).
If a queue with m servers has average interarrival times a and activity times p, let r := p/a, then
(r m )/(m!)
or use Erlang loss table.
im=0 (ri )/(i!)
1
The rate of served output =
Prob(Not all servers are busy).
a
Quality
If the sandard deviation of a population is , then the standard deviation of the sample means of
this population is
X =
n
where n is the size of each sample.
Control charts:
A2
1.88
1.02
0.73
0.58
D3
0
0
0
0
D4
3.27
2.57
2.28
2.11
d2
1.12
1.69
2.06
2.33
Sample size
6
7
8
9
A2
0.48
0.42
0.37
0.34
D3
0
0.08
0.14
0.18
D4
2.00
1.92
1.86
1.82
d2
2.53
2.70
2.85
2.97
p (1 p )
n
Process capability:
Cp = Process capability ratio =
Inventory
Cu
Cu + Co
Expected (lost sales=shortage) in a season = E(max{Demand in a season Q, 0}). When the demand is normally distributed with mean and standard deviation , the expected lost sales is L(z),
where
Q
z=
and L(z) = normdist(z, 0, 1, 0) z (1 normdist(z, 0, 1, 1))