# 11.7.5 Scenario: Effectiveness of the Order Point Technique

### Intended learning outcomes: Explore the changing shape of the inventory curve for continuous and less continuous demand.

This scenario refers to Section 11.3.1.

Figure 11.3.1.1 showed the famous saw-tooth-shaped curve that is character­istic of the order point technique. You can view the curve here:

Explore the changing shape of the inventory curve for continuous and less continuous demand (moving your cursor over the gray icon executes your input choice). Try out different parameters to calculate lot size and service level. Try other consumption values. Observe the effect of the consumption values on the order of the production or procurement batch size. Again, touching the “calculate” icon executes your input choice. The initial demand values are automatically reentered by moving your cursor over the gray demand shape icon.

## Course section 11.7: Subsections and their intended learning outcomes

• ##### 11.7.1 Exercise: ABC Category and ABC Classification

Intended learning outcomes: Determine meaningful ABC categories of some items and perform the ABC classification.

• ##### 11.7.2 Scenario: The ABC-XYZ Analysis and its Use in Materials Management

Intended learning outcomes: Explain the combined ABC-XYZ classification. Describe its use in materials management. Identify the appropriateness of Kanban control as the result of an ABC-XYZ analysis.

• ##### 11.7.3 Exercise: Safety Stock Variation versus Demand Variation

Intended learning outcomes: Find out whether the safety stock level increases with increasing demand.

• ##### 11.7.4 Exercise: Determining Batch Size Depending on Stockout Costs

Intended learning outcomes: Determine the batch size in dependence of carrying costs and stockout costs, average annual consumption, and the standard deviation of demand during lead time.

• ##### 11.7.5 Scenario: Effectiveness of the Order Point Technique

Intended learning outcomes: Explore the changing shape of the inventory curve for continuous and less continuous demand.

• ##### 11.7 Scenarios and Exercises

Intended learning outcomes: Calculate examples for the ABC Classification. Disclose the ABC-XYZ analysis in materials management. Differentiate between safety stock variation and demand variation. Determine batch size depending on stockout costs. Assess the effectiveness of the order point technique.