Question: please use same values and do it completly.please solve it according to the given method please. thanks. 2. The master production plan of a company

please use same values and do it completly.please solve it according to the given method please. thanks.

2. The master production plan of a company has shown below: Period 1 2 3 4 5 6 7 8 9 (weeks) Gross 12 22 25 25 requirements Lead time Setup cost Holding cost Stockout cost 1 $200 $15 $ 12 Period Per order Per week Per week Develop an ordering plan and costs for: a. Lot-for-lot. b. EOQ c. POQ. Which plan has the lowest cost? 8 9 15 23 0 0 0 0 0 0 0 0 0 23 0 0 0 8 9 6 6 4 4 7 2 (a) For the Lot-for-lot rule, the MPS quantities will be exactly the same as that of the net requirements. So, there will be no carrying cost. Period 1 2 3 4 5 6 7 Totals Gross requirements 12 20 70 Projected ending inventory 0 Net requirement 0 12 0 20 0 15 70 MPS 0 12 0 20 0 15 0 0 23 70 MPS start 12 0 20 0 15 0 23 0 70 Total setup cost = 4 MPS start incidents $200 = $800 Total carrying cost = 0 units total ending inventory * $10 = $0 Total stockout cost = 0 units stock out $10 = $0 So, the total cost = 800+0+0 = $800 (b) The average demand per period, D = Total /9 = 70/9 = 7.778 units Setup cost, K = $200 Unit carrying cost, h = $10 So, the EOQ = (2.D.K/h)12 = (2*7.778*200/10)^0.5 = 17.6 i.e. 18 units. Period 1 2 3 4 5 6 7 Totals Gross requirements 12 20 15 23 70 Projected ending inventory 0 7 7 43 Net requirement 0 12 0 0 16 53 MPS 0 18 MPS start 18 0 18 0 Total setup cost = 4 MPS start incidents * $200 = $800 Total carrying cost = 43 units total ending inventory * $10 = $430 Total stockout cost = 0 units stock out * $10 = $0 So, the total cost = 800+430+0 = $1,230 (c) The optimal time between orders = EOQ / Average demand per period = 18/7.778 = 2.31 i.e. 2 periods. So, club the net requirements of the two consecutive periods to get the POQ- based policy. This will eventually reduce to lot-for-lot ordering only. Period 1 2 3 4 5 7 Totals Gross requirements 12 20 15 23 70 Projected ending inventory 0 0 0 0 0 0 Net requirement 0 0 0 23 MPS 20 0 70 MPS start 15 23 So, the total cost will be $800. 0 14 11 0 0 18 0 18 0 0 18 72 18 0 0 18 0 72 6 8 9 0 0 0 0 15 20 0 0 70 12 12 0 0 15 0 0 23 12 0 20 0 0 0 0 70

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!

what is your overall evaluation of PepsiCo?s business portfolio in 2014? Does the portfolio provide the company?s shareholders with an opportunity for above-average market returns? 5 PEPSICO PepsiCo...

can you please assist in decision analysis area. I have attached the questions, answers and the spreadsheets needed, but not sure how to get the answers in the solver spreadsheet. thanks for your...

can i get a solution to this question please. Value: Document (include your file name) 15% of final grade How to complete: 1. Read the following Anniversary Party scheduling problem: As the project...

Use the flexible budget template to complete this problem The Antigua Blood bank, a private charity partly supported by government grants is located on the Caribbean island of Antigua. The blood bank...

Post-mortem of the first phase: 4. How were the new roles defined, communicated, understood? This case presents two phases of a large business transformation project involving the implementation of...

Post-mortem of the second phase: What were the strong points in the second implementation process what areas needed improvements? This case presents two phases of a large business transformation...

Post-mortem of the first phase: How should a vision be communicated? This case presents two phases of a large business transformation project involving the implementation of an ERP system with the...

uestion: 1. IN A STOCK ACQUISITION ACCOUNTED FOR BY THE EQUITY METHOD, A PORTION OF THE PURCHASE PRICE OFTEN IS ATTRIBUTABLE TO GOODWILL OR TO SPECIFIC ASSETS OR LIABILITIES. HOW OR UNDER WHAT BASIS...

check on the file and download the...

Post-mortem of the first phase: How was the project team managed and is the project teams pace sustainable in the longer run? BOMBARDIER CASE STUDY IS IN MY PREVIOUS QUESTION This case presents two...

Transcript Company is preparing a cash budget for February. The company has $150,000 in cash at the beginning of February and expects to have total sales of $800,000, consisting of 25% cash sales and...

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2011 through 2014 except for differences in depreciation on an...

An eample of arrimentory accounting policy that should be disclosed in a Summary of Significant Accounting Policies is the method used for pricing inventory. separation of imventory into raw...

When older adults have difficulty with transportation and communication, or may be reluctant to request needed assistance to which they are entitled, they may be in need of: Group of answer choices...