Decision making is a management tool whose function is to facilitate administrations the fulfillment of the mission, by analyzing the information related to their business and their environment. In this paper, the application of the inventory models to the product's own telephone cards of 5.00 pesos in convertible currency is described in one of the Havana Capital Post Office. As well as the period of time in which the inventory must be controlled. Furthermore, the importance of quantitative methods as a guide tool to automate and accept rational decision making.
When you have four pills left, order more. Anonymous.
Introduction
Managers at all levels and in all areas of the organization make decisions, that is, they choose between two or more alternative examples, senior managers make rational decisions about the goals of the organization by selecting an alternative from a set of them. using quantitative methods as a guide and help tool to automate decision making.
The University Mail agency located in one of the busiest streets of the Centro Habana municipality and belonging to the Cuban Post Company, which aims to guarantee universal postal services and other value-added services for the general population shows unity within of the range of services and merchandise sales, it has a product demanded by the population and to which we want to apply the knowledge acquired in this module, since on several occasions it has been missing due to supplier supplies, causing loss of customers, prestige and potential usefulness.
With this work we want to apply the inventory model for the aforementioned product in order to identify When can we order? What is the reorder point? How many orders will be made?
Work development
Within the inventory models, we want to assess the optimal levels of inventories for our own phone cards product (5.00 cuc), which is in high demand. For this we will apply the characteristic of an inventory system taking into account.
- Inventory cost, (order cost - maintenance cost - missing cost) Demand, (certain or probabilistic). Loss cycle, (revision - continuous or periodic). Advance time, (true or probabilistic). Inventory replenishment, (instantaneous or uniform). Time horizon, (period of time in which the inventory must be controlled).
Case
The sale of own telephone cards at the Correos Universidad point of sale has a stable demand of 35 cards weekly and 1,680 units per year, the cost of the unit is $ 4.25 CUC. It takes 4 weeks to receive an order, the cost of conservation is $ 2.00 CUC. The order cost is $ 5.00 CUC. And the shortage is $ 1.50 CUC.
We want to know to maintain our inventory levels.
- What should be the reordering point? How many is the annual cost of ordering cards? How much is the total cost of inventory ? How many orders will be made in a year?
Current data
Q: CEP.
D: annual demand (u) = 1680 units.
Cp: order cost in $ = $ 5.00 / order.
Cm: unit maintenance cost in $ = $ 2.00 / units.
Cf: missing unit cost in $ = $ 1.50 / units.
L: delivery time in days = 28 days.
What should be the point of reordering?
Reorder Point.
R = DL / 365 = 1680 * 28/365 = 129 units
How much is the annual cost of ordering cards?
Q = 2D * Cp. / Cm = 2 (1680) * 5.00 / 2.00 = 5.94 total minimum cost.
Annual ordering cost:
= D / Q * Cp
= 1680 / 5.94 * 5.00
= $ 56.6 cuc
Annual mant cost:
= Q / 2 * Cp
= 5.94 / 2 * 5.00
= $ 14.90 cuc
How much is the total cost of inventory?
Total inv cost = Ord cost + Maint cost + Missing cost.
Total cost inv. = D / Q * Cp + Q / 2 * Cm K2 + Q / 2 * Cf (IK) 2
K = Cf / Cm + Cf
K = 1.50 / 2.00 + 1.5
K = 2.25
Q = 2D * Cp / Cm K = 2 (1680) * 5.00 / 2.00 * 2.25 = 3.78 = 4 units
Imax = K * Q
Imax = 2.25 * 4
Imax = 9 units
Total cost inv. = D / Q * Cp + Q / 2 * Cm K2 + Q / 2 * Cf (IK) 2
Total cost inv. = 1680/4 * (5) + 4/2 * (2) (2.25) 2 + 4/2 * (1.50) (9- 2.25) 2
Total cost inv. = 241.00 cuc in the year.
How many orders will be made in a year?
Taking into account that every 4 weeks an order is received and that they cost 5.00 cuc, we will decrease the orders from 12 to 6 and we will increase the quantity to order 140 units we will order 280 units to guarantee the existing demand and not fall short or run out of goods.
Conclusions
This work allowed us to assess the importance of the classic economic order quantity model, the certain demand, when we must order, the unit costs of maintaining the inventory and reorder point, as well as the period of time in which the inventory must be controlled in the own phone card indicator.
To conclude we can say that decision-making is a vital component in business management and is directly related to the basic objectives of administrative activity, where decisions can affect or improve the projections of the agencies and in turn of the company.
Bibliography
1. PAVESI, Pedro FJ et al., The Decision, 2004, Buenos Aires, Grupo Editorial Norma. 1998, Caracas, Ediciones Dolmen.
2. ARIÑO, Miguel Ángel, 2005. Decision Making and Governments of Organizations p. 273 to 276.
3. STONER, Jame, Administration, Fifth Edition Chapter Nine / Decision making Pages 273 to 325.
4. Support material prepared for IACC Masters.
