Operations Management
6. Tutorial: Inventory Management (Part 1) – Exercises
Exercise 1: Basics of Inventory Management
Please mention the functions of warehouses and describe them briefly.
, 2
Exercise 2: Economic Order Quantity – Basic Model
The RoboTec Inc. expects a demand of approx. 100 welding robots for next year. The Ro-
boTec Inc. would like to optimize the order quantity of an externally procured component of
the robot, the welding burner. The controlling estimates the costs per order for this welding
burner at 44 €/order. Furthermore, apportioned indirect costs for dealing with the delivery
(e.g. unloading) of 26 €/order have to be considered. The purchase price of the welding burner
amounts to 200 €/piece.
a) Characterize the scope of the EOQ model concerning considered costs, demand as well
as periods.
b) Explain the assumptions as well as the fundamental relations of the EOQ model (basic
model).
Assumptions:
Fundamental Relations:
6. Tutorial: Inventory Management (Part 1) – Exercises
Exercise 1: Basics of Inventory Management
Please mention the functions of warehouses and describe them briefly.
, 2
Exercise 2: Economic Order Quantity – Basic Model
The RoboTec Inc. expects a demand of approx. 100 welding robots for next year. The Ro-
boTec Inc. would like to optimize the order quantity of an externally procured component of
the robot, the welding burner. The controlling estimates the costs per order for this welding
burner at 44 €/order. Furthermore, apportioned indirect costs for dealing with the delivery
(e.g. unloading) of 26 €/order have to be considered. The purchase price of the welding burner
amounts to 200 €/piece.
a) Characterize the scope of the EOQ model concerning considered costs, demand as well
as periods.
b) Explain the assumptions as well as the fundamental relations of the EOQ model (basic
model).
Assumptions:
Fundamental Relations:
