Problem 1: (6.2/224 Silver et.al. (1998) Book)

The demand pattern for another type of filter is:

Jan.	Feb.	Mar.	Apr.	May	June
18	31	23	95	29	37
July	Aug.	Sept.	Oct.	Nov.	Dec.
50	39	30	88	22	36

Those filters cost the company $4.75 each; ordering and carrying costs are $35 and 0.24 $/$/year respectively. The variability coefficient equals 0.33. Use the Silver Meal heuristics to determine the sizes and timing of replenishments of stock.

Variability coefficient: A parameter to determine when to use heuristics method, when demand pattern having variability exceeds some threshold value, it makes sense to change to a heuristic. It is Variability coefficient (VC). In particular, if VC <0.2, Use simple EOQ. Otherwise, Use heuristic. VC=DD2.