Question: Full Throttle orders a key part from an external supplier and needs to determine the optimum ordering plan for the next 5 weeks. The parts

Full Throttle orders a key part from an external supplier and needs to determine the optimum ordering plan for the next 5 weeks. The parts are ordered in bins that contain 200 parts per bin. They can order up to 4 bins per week. The planning team estimated the demand of parts of the next 5 weeks and the supplier gave them the following cost per bin for the next 5 weeks.

Week

1

2

3

4

5

Parts Demanded

750

425

300

575

700

Cost per bin

$2,000

$1,670

$1,840

$2,190

$1,680

They currently do not have any parts on hand and will incur a carrying cost of $7.50 per part based on average inventory.

Develop an Excel model and solve using Solver to find their optimum ordering strategy.

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