Basic Analysis of Spare Part
- Determine the RPN
▪ 1 to 2 = Do not stock
▪ 3 to 12 = Setup stock
▪ 15 to 25 = Setup critical stock - Determine minimum quantity
Min = (usage per year / 365) x Lead time
Economic Order Quantity
푬푶푸= √
2 퐷푆
퐻
where:
D = Demand/ usage in units per year
S = Ordering cost per order (Cost to enter PO, process, approve, receive,
inspect, process, pay for)
H = Inventory carrying cost per unit per year (Cost to store and maintain 20-
30% per year)A plant maintenance department uses 10-1 gallon jugs of gear lube per day.
The facility operates 300 days per year. The storage and handling is $3 per
gallon and it cost $25 per order to process.
Using your calculator, compute for:- EOQ
- How many orders per year?
- What’s the total annual cost?
퐸푂푄 =
√^2 퐷푆
퐻
퐸푂푄 =
√ 2 퐷푆
퐻
퐸푂푄 =
Tip: To compute for the orders per year and total annual cost, use the
following formula, respectively:푶풓풅풆풓풔=