Cost minimization

Cost minimization

1. Cost Minimization & Modeling (Procurement & Materials Management) Submitted to: Dr. Sneha Dohare Ms. Niharika Prasad Submitted by: Siddharth Khanna (55720) MAM-650

2. What is Cost Minimization? Cost minimization is a basic rule used by producers to determine what mix of labor and capital produces output at the lowest cost. In other words, what the most cost-effective method of delivering goods and services would be while maintaining a desired level of quality. Cost minimization aims to achieve the most cost effective way of delivering goods and services to the required level of quality .

3. Benefits of effective cost minimization

4. Approaches to cost minimization

5. Possible sources of cost reduction

6. Potential problems with cost minimization

7. Cost Minimization model General Expression for the total cost per unit time to operate a queuing system. TC = SC + WC Where: TC - Total cost per hour SC- Service cost per hour WC - Waiting cost per hour

8. Algebraic Expression for Waiting cost per house (WC) = Cost of having one customer wait one hour in the queue. W = The average waiting cost per customer. λ = Arrival of customers per hour, in steady state, we use L = AW to obtain the total waiting cost per hour   WC = λ (W ) = ( λ W) = L  

9. Thank You