Question: (b) An engine modification company has the following demand schedule for the next seven months. The operations manager has determined the equipment holding cost to

(b) An engine modification company has the

(b) An engine modification company has the following demand schedule for the next seven months. The operations manager has determined the equipment holding cost to be RM0.85 per month and set up cost as RM178 per month. The inventory at hand is 100, with a lead time of 1 month. Month 1 2 3 4 5 6 7 Requirement 5075 60 70 80 65 85 (1) Calculate the planned order releases using the EOQ technique. Determine the total cost for this plan, including the holding cost of any inventory left over after month 7. [6 Marks] (11) Once a material requirements plan (MRP) has been established, what other managerial applications might be found for the technique? [3 Marks]

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