Question: a) A company wishes to develop a materials requirements plan for producing a particular product (product A) over a seven week period. The lead time
a) A company wishes to develop a materials requirements plan for producing a particular product (product A) over a seven week period. The lead time between releasing an order to the shop floor and producing a unit of product A is two weeks. The company currently has 250 units of the product in stock. The table below shows the forecast demand for product A in each of the next seven weeks. For example, the demand for product A in week 4 is 87 units. Fill in the missing values.
| Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| Demand | 74 | 90 | 71 | 87 | 99 | 83 | 57 |
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(b) A news vendor buys a monthly magazine from a publisher for a unit price of 5.55 and sells it to members of the public for 7.50. Any magazines left over at the end of the month are returned to the publisher and for each magazine returned the news vendor receives 0.50. Past experience indicates that the demand for this magazine from members of the public is expected to have a Normal distribution with mean 80 copies and variance 21. By making use of the table associated with the standard Normal distribution (with mean zero and variance one) presented at the end of this examination paper what would be your advice as to how many copies the news vendor should order from the publisher?
(c) A company purchases a particular component from an external supplier. The company needs 6 units per month of this component. The cost of placing an order with the supplier is 25. The component can be purchased from the supplier at a price per unit of 500 if so desired. However the supplier also offers a quantity discount such that if the company orders enough to supply their needs for a year or more the price per unit is only 400. The cost of holding this component (per year) is estimated to be 10% of the price. Copy the table shown below into your answer book and fill in the values required. Clearly explain any procedure you follow in arriving at your advice, in particular the reason as to why you consider each and every order quantity costed in your answer.
| Recommended order quantity | Total cost per year (, 2dp) |
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