Maximum sales rate

To the extent parts are common, then the overall inventory is less because a single part will support several products. Table 31.3 explains the concept. The simple system we describe only has four parts that are used in different combinations to make up three products. For example, Product 1 uses one unit of Part A, two units of Part B, one unit of Part C, and no units of Part D. The capacity of the system (its physical capacity or its maximum sales rate) is ten units for Product 1 for the planning period. That means that the highest number of Product 1 that can be required is ten. 

Neither item manufacturing nor packaging is a constraint. The supply chain capacity in this case is determined by the final sales of the two end-product SKUs. In this case, the maximum sales rate, MSR in 3C nomenclature, for SKU A is 1000 per day for SKU B, it is 500 per day. 

Armed with this knowledge, a company has a decision to make regarding customer service. It can decide to cover the maximum sales rate or a lesser rate. For example, covering the MSR will protect customer service when all the maximum demands occur at the same time. This may be unlikely but is certainly conservative from a customer service point of view. The 3C creators have introduced what they call a Table of Pulls (TOP) to allow decision makers to apply a lower level of protection. 

In our example, the company decides to provide inventory to protect the maximum sales rate (MSR) to assure 100 percent customer service. Then the company would equate MSR with the TOP. The TOP is the... 

MSR (Maximum Sales Rate) The limit of sales for an end product during a period of time. This limit is determined by a constraint in any supply chain function. The constraint can be a physical constraint such as machine capacity in manufacturing, or a market-related constraint such as the amount the organization can sell. If a company plans to provide 100 percent customer service, it will set its MSR = TOP. The TOP is used for supply chain planning. 

The sales department indicates that the sales potential for products 1 and 2 exceeds the maximum production rate and that the sales potential for product 3 is 20 batches per week. The profit per batch would be 20, 6, and 8, respectively, on products 1, 2, and 3. 

Operating time, rate of production, and sales demand are closely interrelated. The ideal plant should operate under a time schedule which gives the maximum production rate while maintaining economic operating methods. In this way, the total cost per unit of production is kept near a minimum because the fixed costs are utilized to the fullest extent. This ideal method of operation is based on the assumption that the sales demand is sufficient to absorb all the material produced. If the production capacity of the process is greater than the sales demand, the operation can be carried on at reduced capacity or periodically at full capacity. 

There are several cases where it is necessary to determine the optimum conditions for maximum production rate (1) when the demand for a product exceeds the production capacity, and (2) when the capital cost of the purification is significant compared to the operating costs and to the cost of the unrecovered crude. As a matter of fact, sales, hence production, can rarely be kept for a long period at any predetermined level. There must be alternative strategies to adjust the production rate and the recovery yield, while minimizing costs. The absolute maximum production rate can be looked for, or the maximum production rate with a recovery peld constraint. Other combinations will permit the minimization of the production costs. Alternatively, since we know from the literature [12] that the costs associated with the loss, the processing, and the regeneration of the solvent used often accoimt for nearly 40% of the total production costs, we can choose as... 

A certain minimum stock level of all the necessary inputs maximum production rate per day x quantities required per unit of product x number of days required to procure plus some extra stock as safety margin) shall be always maintained so that there wiU be no shortage of such items. However, certain items can be very costly, and hence they shall be bought after a careful study of the data for the total production, actual sales, and actual consumption for the last six months to a year. A reasonably accurate forecast of the demand for the products will be found very useful for the procurement of the right quantities of such costiy items. 

The largest improvements occurred when the product from a distillation column was sold out, and another pound produced meant another pound sold. In one case, the distillation column was being operated at the maximum boilup rate recommended by the vendor of the distillation trays. However, the use of small incremental changes by the sequential optimization routine increased the boilup over a period of several weeks and resulted in the discovery that the trays could be operated at 136% of the maximum capacity recommended by the vendor before flooding occurred. This resulted In additional sales of 800,000 one year during a peak in demand for the product with no added capital. 

Let us consider a product which is sold entirely on the basis of personal recommendation. The rate of sale will depend on the number of people who have already bought the product. Thus initially sales will increase exponentially. Eventually the market will be saturated, and only replacement purchases will be made. If the frequency cui ve may be assumed to be symmetrical about a single maximum value, the cumulative distribution cui ve is known as the logistics cui ve and is defined by Eq. (9-91) ... 

The UK Department of Health negotiates with companies a maximum rate of return on capital employed in their sales to the National Health Service. An overall rate is fixed for the industry as a whole and within this figure an indivi dual firm is awarded a particular rate having regard to the scale and nature of the company s relevant investments and activities and the associated long-term risks . The system may perhaps have to be changed because of EC legislation. 

Interest, dividends, and short-term capital gains are taxed at ordinary income rates in the United States. The combined federal, state, and local marginal tax rate on such income approaches 50% in some jurisdictions. In contrast, long-term capital gains are taxed at a maximum of 20%, which can be postponed until realization upon sale. For this reason, equities are tax advantaged compared with bonds and investments that deliver ordinary income. 

Feed and production rates A feed pump has a maximum capacity sales are limited by market projections. 

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