WIP inventory

WIP (work-in-progress), or in-process inventory, are the unfinished products still in production at a manufacturing plant. The WIP inventory is reflected in the Network Optimization output Network Inventory Summary table. It is based on the total production and the Fixed Order Time from the Production Policies table. The WIP inventory is calculated as follows:

WIP inventory = (production flow * min(Fixed Order Time, time remaining in the model horizon)) / (2 * period length in days)

where:

production flow is the Gross Production Quantity from the Production Flows table

period length is the number of days in the current period

Fixed Order Time (in days) is from the Production Policies table.

WIP Inventory Holding Cost

WIP inventory cost = WIP inventory * product value * carrying cost % * (period length/365)

where:

product value is the Unit Value from the Products table, or the Product Value from the Inventory Policies or Inventory Policies Multi-Period table. The inventory policies value (if populated) overrides that from the Products table.

carrying cost % is the Inventory Carrying Cost % from Model Settings, or the Inv Carrying Cost % in the Inventory Policies or Inventory Policies Multi-Period table. The inventory policies value (if populated) overrides that from the Model Settings.