Question: Lead time is 1 week, setup cost is $ 2 0 0 , and holding cost is $ 1 0 per week. Stockouts are not
Lead time is week, setup cost is $ and holding cost is $ per week. Stockouts are not allowed due to company policy ie If there is an expected stockout, two batches of order size must be placed Develop an ordering plan and calculate the costs for:
Lotforlot ordering policy.
EOQ Economic order quantity ordering policy.
POQ Periodic order quantity ordering policy.
Which ordering policy is better? Why one of the ordering policies results in a substantially higher cost?
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