Queuing theory & Inventory model:
In manufacturing spectrum of business, these two concepts are well revered.
Queuing theory is mathematical & empirical approach to study the waiting time &
aspects of products in a batch or a queue. A queuing model is one constructed based
on this approach in order to efficiently & coherently reduce the waiting time of process
in a business model. Inventory is a complete list of goods, property, raw material or
even data, whichever is the case according to the business, that are stored in a
particular area in order to serve the future of the business. An inventory model is
mathematical & empirical approach to study the cost minimization of Inventory
overhead such that profits can be maximized by most efficient usage of Inventory. Queuing Models: Few of the most prominently used analytical tools to build queueing models to solve day to day queuing problems in business are as mentioned below: Single-Channel Queuing Model Multiple-Channel Queuing Model Constant-Service-Time Model Limited-Population Model We will consider a tool say, Constant service time model, to analyse how this tool helps to solve queuing problems. The constant service time model is actually a special case of a more general variation of the single-server model in which service times cannot be assumed to be exponentially distributed. Service times are said to be general, or undefined. Some service systems have constant, instead of exponentially distributed, service times. When customers or equipment are processed according to a fixed cycle, as in the case of an automatic car wash or an amusement park ride, constant service times are appropriate. Because constant rates are certain, the values for Average length of queue, Average length of queue, Average length of queue are always less than they would be in Single-Channel Queuing Mode, which has variable service rates. As a matter of fact, both the average queue length and the average waiting time in the queue are halved with Constant service time model. Constant-service-model formulas are mentioned below. 2 λ Lq = 2μ(μ − λ) Wq = Lq λ Lq = Length of queue. Wq = Waiting time of queue. λ= Average number of elements in a queue size μ = Average service capacity to serve queue size. …show more content…
This measures how many times average inventory is
"turned" or sold during a period. In other words, it measures how many times a
company sold its total average inventory rupee amount during the year. A company
with Rs.100 of average inventory and sales of Rs.1000 effectively sold its 10 times
over. The inventory turnover ratio is calculated by dividing the cost of goods sold for a
period by the average inventory for that period.
Inventory Turnover Ratio =
Cost of Goods Sold
Average Inventory
A Case snippet: Ekbote Furniture Company sells industrial furniture for office
buildings. During the current year, Ekbote reported cost of goods sold on its income
statement of Rs. 1,000,000. Ekbote beginning inventory was Rs. 3,000,000 and its
ending inventory was Rs. 4,000,000. Ekbote turnover is calculated like this:
Inventory Turn Over Ratio =
1000000
3000000 + 4000000
2
= .29 Times
As you can see, Ekbote turnover is .29 times. This means that Ekbote only sold
roughly a third of its inventory during the year. It also implies that it would take Donny
approximately 3 years to sell his entire inventory or complete one turn. In other words,
Danny does not have very good inventory
In manufacturing spectrum of business, these two concepts are well revered.
Queuing theory is mathematical & empirical approach to study the waiting time &
aspects of products in a batch or a queue. A queuing model is one constructed based
on this approach in order to efficiently & coherently reduce the waiting time of process
in a business model. Inventory is a complete list of goods, property, raw material or
even data, whichever is the case according to the business, that are stored in a
particular area in order to serve the future of the business. An inventory model is
mathematical & empirical approach to study the cost minimization of Inventory
overhead such that profits can be maximized by most efficient usage of Inventory. Queuing Models: Few of the most prominently used analytical tools to build queueing models to solve day to day queuing problems in business are as mentioned below: Single-Channel Queuing Model Multiple-Channel Queuing Model Constant-Service-Time Model Limited-Population Model We will consider a tool say, Constant service time model, to analyse how this tool helps to solve queuing problems. The constant service time model is actually a special case of a more general variation of the single-server model in which service times cannot be assumed to be exponentially distributed. Service times are said to be general, or undefined. Some service systems have constant, instead of exponentially distributed, service times. When customers or equipment are processed according to a fixed cycle, as in the case of an automatic car wash or an amusement park ride, constant service times are appropriate. Because constant rates are certain, the values for Average length of queue, Average length of queue, Average length of queue are always less than they would be in Single-Channel Queuing Mode, which has variable service rates. As a matter of fact, both the average queue length and the average waiting time in the queue are halved with Constant service time model. Constant-service-model formulas are mentioned below. 2 λ Lq = 2μ(μ − λ) Wq = Lq λ Lq = Length of queue. Wq = Waiting time of queue. λ= Average number of elements in a queue size μ = Average service capacity to serve queue size. …show more content…
This measures how many times average inventory is
"turned" or sold during a period. In other words, it measures how many times a
company sold its total average inventory rupee amount during the year. A company
with Rs.100 of average inventory and sales of Rs.1000 effectively sold its 10 times
over. The inventory turnover ratio is calculated by dividing the cost of goods sold for a
period by the average inventory for that period.
Inventory Turnover Ratio =
Cost of Goods Sold
Average Inventory
A Case snippet: Ekbote Furniture Company sells industrial furniture for office
buildings. During the current year, Ekbote reported cost of goods sold on its income
statement of Rs. 1,000,000. Ekbote beginning inventory was Rs. 3,000,000 and its
ending inventory was Rs. 4,000,000. Ekbote turnover is calculated like this:
Inventory Turn Over Ratio =
1000000
3000000 + 4000000
2
= .29 Times
As you can see, Ekbote turnover is .29 times. This means that Ekbote only sold
roughly a third of its inventory during the year. It also implies that it would take Donny
approximately 3 years to sell his entire inventory or complete one turn. In other words,
Danny does not have very good inventory