Question: Corona Ltd. Is facing issue with their ignition switch, some time they are overly stocked and some time they face stock outs. Purchase manager has

Corona Ltd. Is facing issue with their ignition switch, some time they are overly stocked and some time they face stock outs. Purchase manager has identified the reason behind this problem is the lack of planning for ordering the ignition in the right time. So the purchase manager has decided to make a material requirement plan for the ignition switch ordering. Considering the following information, you are requested to find whether lot for lot method or EOQ method is best suited for ordering and Why?

Week	1	2	3	4	5	6	7	8	9
Gross requirements	0	35	40	55	0	30	0	45	30
Projected on hand
Net requirements
Planned order receipts
Planned order releases

Note (lead time is 1 week, initial on hand inventory is 20 units, setup cost is $150, holding cost per week for a unit is $1).

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