Worked example of a production department
Suppose that a production department makes some 1500 different items a year, 80% of them ordered by one, 13% by two, 3.5% by three and less than 0.5% by more than 3 of 40 different customers (therefore there are no deliveries from stock). 90% of these items are made in a single operation, 5.5% in two, and the remaining 0.5% in three operations. 28% of the customers are regulars, planning as best they can. Now, the total run is divided into order quantities, ordered at regular intervals. Table 8.1 shows just how far this strategy pays off.
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