A …rm uses components A, B, and C to assemble a …nal product “F”; see the bill of materials in Figure 2.

Calculate the total inventory cost for the end item F during the eight weeks. Note that, for each week, the inventory cost includes a …xed ordering cost and a holding cost. We assume that the per order …xed ordering cost is $200/order, and the unit holding cost is $1 per item per week. The …xed cost is incurred each time when the …rm places an order. The holding cost is calculated according to the number of remaining items at the end of each week.

Week	1	2	3	4	5	6	7	8
MPS
Component A	Lot-sizing policy: …xed period of two; Lead time: 2 weeks; Present on hand: 68; Scheduled receipts: 100 units in Week 1.
Gross Requirement
Scheduled Receipts
Projected On Hand
Net Requirements
PO Receipts
PO Releases
Component B	Lot-sizing policy: lot-for-lot; Lead time: 2 weeks; Present on hand: 310; Scheduled receipts: 200 units in Week 2.
Gross Requirement
Scheduled Receipts
Projected On Hand
Net Requirements
PO Receipts
PO Releases

Table 2: MRP table for Question AQ5.

F A(2) (2) (3)