MOS 3330
Operations Management
Western University · DAN Management & Organizational Studies
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COMPLETE FORMULA & CONCEPT CHEAT SHEET
All Formulas · Decision Rules · Key Concepts · Worked Examples
✓ Inventory Management — EOQ, ROP, Safety Stock
✓ Forecasting — Moving Average, Exponential Smoothing, MAD/MSE
✓ Capacity Planning — Utilization, Efficiency, Best Operating Level
✓ Aggregate Planning — Chase, Level, Mixed Strategies
✓ Supply Chain Management — Bullwhip Effect, Lead Time, Lean
✓ Quality Management — Control Charts, Six Sigma, SPC
✓ Process Design — Flow Types, Little's Law, Bottleneck Analysis
· Summer Day Final Exam Edition · Graded A+
, SECTION 1 — INVENTORY MANAGEMENT · EOQ · ROP · Safety Stock
1.1 — Economic Order Quantity (EOQ)
EOQ: Q* = √(2DS / H)
D = annual demand (units) · S = ordering cost per order ($) · H = holding cost per unit per year ($)
Annual Ordering Cost: AOC = (D/Q*) × S
Number of orders per year × cost per order
Annual Holding Cost: AHC = (Q*/2) × H
Average inventory × holding cost per unit
Total Annual Cost: TC = AOC + AHC = (D/Q*)×S + (Q*/2)×H
At EOQ: AOC = AHC (they are equal)
Orders per Year: N = D / Q*
Time Between Orders: T = Q* / D (or T = 1/N)
Express as fraction of year; multiply by 365 for days
⚡ EOQ Exam Trap
Always check units consistency: if D is annual and H is monthly, convert H to annual (×12) before plugging in. The
answer must be in the same time unit as D.
1.2 — Reorder Point (ROP) & Safety Stock
ROP (no variability): ROP = d × L
d = daily demand (D/365 or D/working days) · L = lead time in days
Safety Stock: SS = z × σ_dLT
z = service level z-score (e.g. 95% → z=1.65) · σ_dLT = std dev of demand during lead time
σ_dLT (known): σ_dLT = σ_d × √L
σ_d = std dev of daily demand · L = lead time in days
ROP (with safety stock): ROP = d×L + SS
Most common exam form
Service Level z-score
90% 1.28
95% 1.65
Operations Management
Western University · DAN Management & Organizational Studies
──────────────────────────────────
COMPLETE FORMULA & CONCEPT CHEAT SHEET
All Formulas · Decision Rules · Key Concepts · Worked Examples
✓ Inventory Management — EOQ, ROP, Safety Stock
✓ Forecasting — Moving Average, Exponential Smoothing, MAD/MSE
✓ Capacity Planning — Utilization, Efficiency, Best Operating Level
✓ Aggregate Planning — Chase, Level, Mixed Strategies
✓ Supply Chain Management — Bullwhip Effect, Lead Time, Lean
✓ Quality Management — Control Charts, Six Sigma, SPC
✓ Process Design — Flow Types, Little's Law, Bottleneck Analysis
· Summer Day Final Exam Edition · Graded A+
, SECTION 1 — INVENTORY MANAGEMENT · EOQ · ROP · Safety Stock
1.1 — Economic Order Quantity (EOQ)
EOQ: Q* = √(2DS / H)
D = annual demand (units) · S = ordering cost per order ($) · H = holding cost per unit per year ($)
Annual Ordering Cost: AOC = (D/Q*) × S
Number of orders per year × cost per order
Annual Holding Cost: AHC = (Q*/2) × H
Average inventory × holding cost per unit
Total Annual Cost: TC = AOC + AHC = (D/Q*)×S + (Q*/2)×H
At EOQ: AOC = AHC (they are equal)
Orders per Year: N = D / Q*
Time Between Orders: T = Q* / D (or T = 1/N)
Express as fraction of year; multiply by 365 for days
⚡ EOQ Exam Trap
Always check units consistency: if D is annual and H is monthly, convert H to annual (×12) before plugging in. The
answer must be in the same time unit as D.
1.2 — Reorder Point (ROP) & Safety Stock
ROP (no variability): ROP = d × L
d = daily demand (D/365 or D/working days) · L = lead time in days
Safety Stock: SS = z × σ_dLT
z = service level z-score (e.g. 95% → z=1.65) · σ_dLT = std dev of demand during lead time
σ_dLT (known): σ_dLT = σ_d × √L
σ_d = std dev of daily demand · L = lead time in days
ROP (with safety stock): ROP = d×L + SS
Most common exam form
Service Level z-score
90% 1.28
95% 1.65
