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  Holding or carrying costs  relate to having the items physically in storage. Costs include the cost due to interest, insurance, taxes, depreciation, obsolescence, deterioration, spoilage, pilferage, breakage, and warehousing costs (heat, light, rent, security). They also include opportunity costs associated with having funds which could be used elsewhere tied up in inventory. Holding costs are stated in either of the two ways: as a percentage of unit price or as a dollar amount per unit. In any case, typical annual holding costs range from 20 percent to 40 percent of the value of an item. In other words, to hold a $100 item for one year could cost from $20 to $40. Ordering costs  are the costs of ordering and receiving inventory. They are the costs that vary with the actual placement of an order. These include determining how much is needed, preparing invoices, shipping costs, inspecting goods upon arrival for quality and quantity, and moving the goods to temporary storage. Ordering costs are generally expressed as a fixed dollar amount per order, regardless of order size The items are classified according to the rate of consumption. Thus, the materials can be fast (F), slow (S) and non-moving types (N). F-type materials get the maximum attention, and the Ntype the minimum for their control and procurement. Let us apply this concept in our kitchen as they say charity begins at home. Let the different items in our home be: rice, pulses, salt, sugar, tea, vegetables, fruits, medicine, cosmetics, shaving blades, wound plasters, and dry-fruits. According to FSN, they can be classified as F = Rice, pulse, salt, sugar, tea are consumed almost daily at relatively faster rate and they need more attention to avoid stock-out situation in the house specially if some unexpected guests happen to drop in from somewhere. S = Fruit, dry fruits are consumed at a moderate speed and need moderate attention. N = Medicine, shaving blades, wound plasters, cosmetics are consumed at a very negligible rate and need less attention. They can be bought once and can be consumed leisurely when need arises. The same concept can be extended to industrial or war situation. For example, the bullets are fast moving items but a nuclear bomb is almost a non-moving item. In fact it may never be used but it consumes lot of revenue. Such items are sometimes called insurance items as they ensure a kind of deterrent and may prevent a war between two nations just by their presence. Nature of Demand known/constant/static DTA provides KPIs for lost production over a chosen time period, and also the latest Downtime and Rate Loss events. This enables comparisons to be made between different production lines and shifts over a chosen time period. Lost production can be measured either as Downtime (on a time basis) or as Rate Loss (measured by production quantity lost). Downtime information can be translated into Rate Loss (and vice versa) based on assigned plant and unit capacities.  DTA enables staff to add reasons for each event, adding valuable understanding to the underlying reasons for lost production. Losses can also be attributed to multiple reasons, dividing the total loss by assigned percentages. Downtime can still appear in reports even if a reason hasn't been entered. Downtime Losses can be automatically collected and registered on a per-plant basis, while Rate Loss can be calculated and registered on a daily basis per plant item. DTA results can be stored in the Plant Historian to ensure a common data set with other production performance information. Typical DTA system reports include a summary report, reason classifications, downtime rankings and rate loss rankings. Users can usually view reports by day, week, month, quarter or year. Custom reports can often also be created within Microsoft Excel and/or through customer database queries. Both these and standard reports can generally be scheduled for emailing to users. Quantifying the cost of downtime in lost production  In order to calculate the impact of downtime, it's necessary to understand the cost to the business of consequent lost production. Establishing this enables accurate ROIs to be calculated for proposed action plans. Factors that influenced the decision to include DTA in the plant's automation system included the need to ensure product quality and consistency, a strong desire to quickly resolve the inevitable issues that attend the commissioning and start-up of a plant, and the need to ensure that power and utilities maintained 100% continuity of supply.  
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