Question: Consider a company facing a demand pattern and costs as follow: Month Sequential Number Requirements (units) Jan 1 20 Feb 2 40 Mar 3 110

Consider a company facing a demand pattern and costs as follow:

Month Sequential Number Requirements (units)
Jan 1 20
Feb 2 40
Mar 3 110
Apr 4 120
May 5 60
June 6 30
July 7 20
Aug 8 30
Sep 9 80
Oct 10 120
Nov 11 130
Dec 12 40
Total 800

A = $25; r(per month) = $0.05 (carrying costs are very high in this industrial); v = $4

Using a "three-month" decision rule, the replenishment schedule and associated costs are as follows:

Month 1 2 3 4 5 6 7 8 9 10 11 12 Total
Starting Inventory 0 150 110 0 90 30 0 110 80 0 170 40
Replenishment 170 0 0 210 0 0 130 0 0 290 0 0 800
Requirements 20 40 110 120 60 30 20 30 80 120 130 40 800
Ending Inventory 150 110 0 90 30 0 110 80 0 170 40 0 780

Total replenishment costs = $100

Total carrying costs = $156

Total replenishment + carrying = $256

a). Construct a replenishment schedule and calculate the associated costs using the Fixed Economic Order Quantity method

b). Repeat using the Wagner-Whitin Algorithm

c). Repeat using the Silver-Meal Heuristic.

d). Repeat using the Least Unit Cost method

e). Repeat using the Part-period Balancing method

f). Repeat using the Periodic Order Quantity method

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!