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intro to logistics Cheat Sheet (DRAFT) by

Transport-Lecture 4: Introduction to logistics

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Economic order quantities

Determines the volume and frequency of orders that minimise the logistic costs within a specific time window.
𝑄: Order Volume
𝑆: Ordering Costs
𝐶: Unit Cost
𝐷: Demand
ℎ: Holding Cost
𝐼: Handling Cost
Total Ordering Costs = # of orders * costs per order
O = DS/Q
Total Holding costs = Average holding costs * order volume
𝐻= 𝑄ℎ/2, where ℎ=𝐼𝐶
Total costs of ordering and holding cargo that satisfies demand 𝐷 is:
𝑇=𝑂+𝐻
= DS/Q + Qh/2
Determines the volume and frequency of orders that minimise the logistic costs within a specific time window.
1. Optimal order 𝑄* is achieved when Holding and Order costs are balanced.
2.Inve­ntory costs have a small impact due to 𝑄*.
3.Cycle time = Q*/D, and number of orders per year = D/Q*
Q* = sqrt(2­SD/h)

SD/Q* = hQ*/2

Economic order quantities

Determines the volume and frequency of orders that minimise the logistic costs within a specific time window.
𝑄: Order Volume 𝑆: Ordering Costs 𝐶: Unit Cost ℎ: Holding Cost 𝐼: Handling Cost 𝐷: Demand