Production&opera

tion
Magt.

Presented to
Sir Khalid Mukhtar
 Dedication

I dedicate this presentation to my

Loving Parents
And
Beloved Teacher
 Acknowledgement

One is the first the Almighty ALLAH whose
blessings are above each and every thing
which make us able to present my tiny effort.
All prays to HAZARAT MUHAMMAD (PBUH) who
is the reason for creation of the universe and
whose kindness came to my heart.
On the successful completion of my
presentation, i wish to express our gratitude
and heart worthy acknowledgement to the
gentlemen whose inspiration helped me in the
completion of presentation.
Turn On Tomorrow!

Table of contents

Introduction
Vision&Mission
Specific Objective
Inventory & Inventory system
Inventory Model
Cost of inventory
Lead time
Inventory Model in Graph
Economic order Quantity
Formula of EOQ
Mathematical Problem
Observation
Conclusion
 INTRODUCTION

1938-1969 Samsung's Beginnings. OnMarch 1,
1938,founding chairman Byung-Chull Lee started a business
in Taegu, Korea.
From its inception as a small export business in Taegu, Korea,
Samsung has grown to become one of the worlds leading
electronics companies, specializing in digital appliances and
media, semiconductors, memory, and system integration.
Today Samsung's innovative and top quality products and
processes are world recognized.
For over 70 years, Samsung has been dedicated to making a
better world through diverse businesses that today span
advanced technology, semiconductors, skyscraper and plant
construction, petrochemicals, fashion, medicine, finance,
hotels, and more.
Samsung Electronics, leads the global market in high-tech
electronics manufacturing and digital media.
Vision & Mission

Samsung Samsung is guided
Electronics' vision for by our mission is to
the new decade is, be the best Digital
"Inspire the World, E-company
Create the Future."
 SPECIFIC OBJECTIVES

Study the inventory level
Determine the optimal inventory policy
Use inventory model as a mathematical
problem solving tools
 Inventory &
Inventory system

Inventory is the set of items that an
organization holds for later use by the
organization.
An inventory system is a set of policies that
monitors and controls inventory. It determines
how much of each item should be kept, when
low items should be replenished, and how
many items should be ordered or made when
replenishment is needed
 Inventory Model

Mathematical equation or formula that helps a
firm in determining the economic order
quantity, and the frequency of ordering, to
keep goods or services flowing to the
customer without interruption or delay.
 The cost of
Inventory

Purchase Cost
Setup Cost or Ordering Cost
Holding Cost or Carrying Cost
Shortage Cost
 Lead time

The amount of time between
the placing of an order and the
receipt of the goods ordered.
Inventory Model in
Graphs

Inventory versus time in the EOQ model
 Economic Order
Quantity

Economic order quantity is
the level of inventory that
minimizes the total
inventory holding costs and
ordering costs.
Formula of EOQ
Model

Y = Optimal order quantity or Economic

order quantity.
D = Demand quantity of the product
K = Setup Cost or Ordering Cost
H = holding cost per unit also known as
carrying cost

 MATHEMATICAL PROBLEM

A retailer of Samsung mobile phone Samsung
Premium Partner stocks different models of
Samsung mobile phone. The demand of
different models of Samsung mobile phone is
40 sets per day. It costs the retailer each time
tk. 20* to order. A set held in stock for a day
will cost tk. 15** per set/ day which includes
space rent for the inventory. The amount of
time between the placing of an order and the
receipt of the goods ordered is 6 hours.
Determine the Optimal Inventory Policy of
Samsung Premium Partner for ordering.
 Solution

Here
D = Demand quantity of the product = 40 sets/day
K = Setup Cost or Ordering Cost =tk. 20 per order
H = Holding cost per unit also known as carrying cost = tk. 15
sets/day
L = Lead time= 6 hours =0.25 days

Formula for Optimal Order Quantity is

EOQ, Y=
So,
EOQ, Y=
Y = 10.33 sets
Solution

Associated
cycle ) No of order = 1/ t0
length is, t0 = = 1/ 0.26
t0 = = 3.85
per day

t0 = 0.26 day
(5)Total Cost of Units
Whenever Inventory TCU= +
drops to
= +
=L = 77.45 +
= .25 40 77.45
= 10units. = TK. 155
 Additional
information

Ordering Cost:
Telephone Cost= tk. 20 per order as their
supplier have policy that they deliver their
supply by themselves.
Holding Cost:
Space Rent= tk. 18000 per month= tk.
18000/30 = 600 per day= 600/40= tk. 15
unit/day.
 Observation

We observed the total activities of Samsung Premium
Partner very carefully while completing our report on
Inventory Model.The following are some extract of the
major findings of this report
Optimal Order Quantity is 10.33 sets for Samsung
Premium Partner
Its associated cycle length is 0.26 day
Its reorder point occurs when the inventory level drops to
10 units
No of order is required per day is 3.85
Total Cost is Tk. 155
Lead time is effective
 Conclusion

Inventory management is an important part of a business
because inventories are usually the largest expense
incurred from business operations.
Most companies will use an inventory management
system that will track and maintain the inventory required
to meet customer demand.
Most systems used by companies are linked to the
management or accounting information system, increasing
the effectiveness of operations.