F. W. HARRIS – EOQ MODELShah Rukh Zafar Suri (C)Inzamam Ashraf (L)Kashif BashirAsad MustafaMuhammad ImtiazSajid Mehmood

Asad Mustafa

INTRODUCTION (F. W. HARRIS)

INTRODUCTION OF F. W. HARRIS

Born in Deering, Maine on August 8, 1877

Parents are Fred Ford and Harriet Whitney (Fox) Harris

His major contribution as a management scientist is admirable

F. W. Harris – Engineer, Manageme

nt Scientist,

Patent Attorney Holder

F.W. Harris (1877-1962)

HOBBIES

Thoroughly enjoyed life in Los Angeles and the American West

Enthusiastic and lifelong golfer, although only an average player

Trout fishing and took many pack trips to inaccessible area, British Columbia

Photography nut Purely social activities bored him

FAMILY LIFE

F. W. Harris loves outings with his family

F. W. Harris & his wife Eugenia enjoying sitting by a stream near a large grove of trees

FAMILY

ACHIEVEMENTS

President of Big Rock Ranch Co.

Vice President of Wulff Process Co.

Vice President of Patco, Inc

First President of the Los Angeles Patent Law Association

MEMBERSHIPS

Member of the American Bar Association Member of American Patent Law

Association Member of American Institute of Electrical

Engineers Member of American Society of Mechanical

Engineers Member of American Chemical Society Member of the California Club Member of the Wilshire Country Club

Kashif Bashir

BRIEF HISTORY

HISTORY

Born in 1877 and grew up in the Portland, Maine area

He received a high school education till 1895

He worked for four years as an engineering apprentice and draftsman for two Portland employers

1. Belknap Motor Company2. Maine Electric Company

HISTORY

In 1900, he moved to Pittsburgh, Pennsylvania

He became a draftsman and engineer for Heyl and Patterson in Pittsburgh

From 1904—1912, Harris was employed as an engineer for the Westinghouse Electric and Manufacturing Company in East Pittsburgh

ELECTRICAL FIELD HISTORY

Tutoring and self-study had educated him in Electrical Engineering, and he had patented a number of inventions in the Electrical field

These patents had all been assigned to Westinghouse as his employer. Patents continued to be granted in his name and assigned to Westinghouse as late as 1916

HISTORY

At the age of 35, Harris thought to retool his career

He thought that his agreement with Westinghouse barred competitive employment, and blocked him from further inventions in Electrical field

PATENT ATTORNEY HISTORY

In 1912, Harris left Westinghouse and moved to Los Angeles, California

He may have wanted to expand his horizons beyond the confines of Westinghouse

The became a consulting engineer in Los Angeles, and there he entered the field of patent law

PATENT ATTORNEY HISTORY

He was admitted to practice before the U.S. Patent Office in 1914 and became a member of the California Bar in 1916

His admission to practice before the U.S. Supreme Court was in 1922

In Los Angeles, Harris was initially associated with the firm of Townsend, Graham and Harris and later with the firm of Graham and Harris before opening his own office in 1923

PATENT ATTORNEY HISTORY

He was one of the founders and, in 1934, the first president of the Los Angeles Patent Law Association

Up to the time of his death he was a member of the American Bar Association and the American Patent Law Association

He died in Los Angeles on October 27, 1962 at the age of 85

Shah Rukh Zafar Suri

MAJOR CONTRIBUTIONS

CONTRIBUTIONS

His life is full of achievements and contributions in his three fields:

Electrical Engineering

Management Scientist

Patent Attorney Holder

ELECTRICAL FIELD

He had patented a number of inventions in the Electrical field

Harris's activities as an inventor spanned more than 50 years

His first (joint) patent, issued in 1904 and assigned to Heyl and Patterson, was for a speed controller

His last patent, issued in 1958 when he was 80 years old, was for components of a regenerative heat exchanger

ELECTRICAL FIELD

Up-till 1916, were for electrical devices—circuit breakers and switches, fuses, and controllers for electric motors—and were assigned to Westinghouse (Company)

Later patent ones were associated with petroleum extraction—devices for pumping oil, dehydrators and separators for oil emulsions, and apparatus for reaming wells

ELECTRICAL FIELD

Some scatter inventions or works were on:

I. Disc harrowII. Automatic water heatersIII. Side-loading hearse with a fixed

turntable

ELECTRICAL FIELD

Harris contributed frequently to the discussions of technical papers in the Transactions of AIEE during the period 1910-1915

He also served on AIEE's Protective Apparatus Committee in 1915 and 1916

MANAGEMENT SCIENCES

The first paper on management sciences was the one on the EOQ formula

Published in Factory, The Magazine of Management in its February 1913 issue

Cited by more than 100 people in their research papers and over 10k readers in 1913

A dozen more of his articles were published in Factory over the next five years.

PATENT ATTORNEY

Ford Harris authored or coauthored two books and more than a score of articles, comments, and reviews

His writings in this area began in 1914 with a series on practical patent issues that was published in Machinery, and continued through 1954, when he was 76 years old

Inzamam Ashraf

MANAGEMENT SCIENCES

CONTRIBUTIONS TOWARDS MANAGEMENT Ford Harris's writings on management topics

must have begun soon after he left Westinghouse in 1912

His first full paper, "How Many Parts to Make at Once," in which he develops the EOQ model, appeared in Factory, The Magazine of Management in February 1913

Harris´s Economic Order Quantity (EOQ) model has been widely studied and is staple of virtually every management science or inventory management textbook

After this a rapid series of publications begins

CONTRIBUTIONS TOWARDS MANAGEMENT The A. W. Shaw Company’s flagship

publication was System, The Magazine of Business, which was renamed Business Week after it was acquired by McGraw-Hill in 1928

Harris contributed an article on the “make or buy” problem to System in 1914

CONTRIBUTIONS TOWARDS MANAGEMENT "How Much Stock to Keep on Hand" was

also published in the following month in system, The magazine of Business

This takes more of a systems view of the inventory function, and shows considerable understanding of the need for coordination between marketing, engineering, and production

CONTRIBUTIONS TOWARDS MANAGEMENT Ford Harris's original 1913 paper on the EOQ model

was forgotten until its rediscovery in 1988 His chapter on the EOQ model in The Library of

Factory Management was erroneously cited and apparently unread for many years

At various times, others have been credited with the development of the EOQ formula

It does not appear that Harris sought, received, or expected any recognition for this contribution during his lifetime. Even his own family was unaware that he had made such a contribution.

Sajid Mehmood

EOQ MODEL – INVENTORY & INVENTORY CONTROL

INVENTORY

Inventories represent those items which are either stocked for sale or they are in the process of manufacturing or they are in the form of materials, which are yet to be utilized

It is necessary to hold inventories of various kinds to act as a buffer between supply and demand for efficient operation of the system

Thus, an effective control on inventory is a must for smooth and efficient running of the production cycle with least interruptions

BENEFITS OF KEEPING INVENTORIES

To stabilize production To take advantage of price discounts To meet the demand during the

replenishment period To prevent loss of orders (sales) To keep pace with changing market

conditions

INVENTORY CONTROL

Inventory control is a planned approach of determining what to order, when to order and how much to order and how much to stock so that costs associated with buying and storing are optimal without interrupting production and sales

1. Order level - When should an order be placed?

2. Order quantity - How much should be ordered?

OBJECTIVES OF INVENTORY CONTROL adequate supply of products to

customer financial investment in inventories is

minimum Efficient purchasing, storing,

consumption and accounting for materials

maintain the stock within the desired limits

To ensure timely action for replenishment

Scientific base for both short-term and long-term planning of materials

BENEFITS OF INVENTORY CONTROL

Improvement in customer’s relationship Smooth and uninterrupted production

and, hence, no stock out Efficient utilization of working capital Minimizing loss due to deterioration,

obsolescence damage and pilferage Economy in purchasing Eliminates the possibility of duplicate

ordering.

Muhammad Imtiaz

EOQ MODEL – ECONOMIC LOT SIZE FOR INVENTORY CONTROL

EOQ MODEL

How much to order, two basic costs are considered namely:

1. Inventory carrying costs2. Ordering or acquisition costs As the quantity ordered is increased, the inventory

carrying cost increases while the ordering cost decreases.

EOQ MODEL

The ‘order quantity’ means the quantity produced or procured during one production cycle. Economic Order Quantity (EOQ) is that size of order which minimizes total costs of carrying and cost of ordering. i.e., Minimum Total Cost occurs when

Inventory Carrying Cost = Ordering Cost

EOQ - SOLUTION METHODS

Economic order quantity can be determined by two methods:

Tabulation method

Analytical method

TABULATION METHOD - STEPS

Select the number of possible lot sizes to purchase

Determine average inventory carrying cost for the lot purchased

Determine the total ordering cost for the orders placed

Determine the total cost for each lot size chosen which is the summation of inventory carrying cost and ordering cost

Select the ordering quantity, which minimizes the total cost

TABULATION METHOD - EXAMPLE

ANALYTICAL METHOD - ASSUMPTIONS Demand is known and uniform Shortages are not permitted, i.e., as soon as the

level of the inventory reaches zero, the inventory is replenished

Production or supply of commodity is instantaneous. Lead-time is zero

EOQ FORMULAE

C1 = Inventory carrying costC3 = Set-up cost per production runD = Total number of units producedQ = Lot size in each production run

PROS AND CONS

This theory gives systematic approach to find lowest possible cost for economic lot sizes.But its cons also exist:

 Demand is not constant in real cases. Demand of Goods fluctuates in real cases

Lead time is also non zero in real cases. Shortages are permitted in real cases. Production and supply is not istantaneous in

real cases.

Thanks for your

Attention