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Table 5.8 Silver-Meal solution summary Month Order quantity Ordering cost Holding cost Inventory cost January 36 $80 $31.50 S111.50 February 60 S80 S52.50 $132.50 March 96 S80 $103.25 $183.25 April May 39 S80 $34.13 SI14.13 June 75 S80 $65.62 S145.62 Total inventory cost (TIC) 5400 $287.00 $687.00 h29 Type of cost Description Ordering cost Since an order is placed, we incur an ordering cost of $80. Holding cost Since we receive the ordered quantity of 75 units in full at the beginning of June, the inventory level at the beginning of June would be 75 units. The inventory level at the end of June would 0 units. So, the average inventory level in June would be 75 +0 2 =37.5 units The total holding cost for the month of June would therefore, be =(37.5) $1.75 = $65.63 Since we do not have the demands for the subsequent months, we stop the solution process here. The solution summary to this lot-sizing problem based on the Silver-Meal method is shown in Table 5.8. The solution produced by the Silver-Meal method suggests that we place an order for 36 units in January, 60 units in February, 96 units in March (that would cover demand for March and April), 39 units in May, and 75 units in June. The total inventory cost for the planning horizon is $687. Solved Problem 5.3 Monthly demand for an item over 6 months is 32, 19, 12, 15, 23, and 12, units respectively. Using Silver-Meal method, determine the total inventory cost if the holding cost is $1.5 per unit per month and the ordering cost is $40 per order