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Applying those rules will give the following results for the AMC (6 months):

Table 9.2 AMC (6 months) based on Demand (Units)

 

 

 

 

 

demand

month

 

 

 

 

 

Jul-03

0

1

(no demand ; out-of-stock <15 days)

Aug-03

40

1

 

Sep-03

0

0

(no demand ; out-of-stock >=15 days)

Oct-03

200

1

 

Nov-03

200

1

 

Dec-03

0

0

(no demand ; out-of-stock <15 days)

 

 

 

 

total

440

4

 

 

 

 

 

AMC

440/4=110

 

 

 

 

 

 

 

 

 

Table 9.3 AMC (6 months) based on Quantity Issued (Sales)

 

demand

month

 

Jul-03

0

1

(no demand ; out-of-stock <15 days)

Aug-03

20

1

 

Sep-03

0

0

(no demand ; out-of-stock >=15 days)

Oct-03

100

1

 

Nov-03

100

1

 

Dec-03

0

0

(no demand ; out-of-stock <15 days)

 

 

 

 

total

220

4

 

 

 

 

 

AMC

220/4=55

 

 

 

 

 

 

The example shows clearly that in case of shortage of supplies the AMC is well underestimated.

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