Question: Q.4. An end item is fabricated from a single component supplied by a local distributor. The end iten is produced on a cycle every four

Q.4. An end item is fabricated from a single component supplied by a local distributor. The end iten is produced on a cycle every four weeks, or 13 times in a year, during week 3,7,11,15,19,23,27,31,35,39,43,47, and 51. Annual demand for the end item is 52.000 units. Each component cost $3.50, and the order cost is $125 per lot. The annual inventory holding cost is 20% of the unit cost, and the lead time is a constant one week a) What is the total annual cost with EOQ? (10 Marks) b) What is the total annual cost with MRP with lot for lot ordering? (10 Marks) c) Compare the EOQ and MRP costs. (10 Marks) Q.4. An end item is fabricated from a single component supplied by a local distributor. The end iten is produced on a cycle every four weeks, or 13 times in a year, during week 3,7,11,15,19,23,27,31,35,39,43,47, and 51. Annual demand for the end item is 52.000 units. Each component cost $3.50, and the order cost is $125 per lot. The annual inventory holding cost is 20% of the unit cost, and the lead time is a constant one week a) What is the total annual cost with EOQ? (10 Marks) b) What is the total annual cost with MRP with lot for lot ordering? (10 Marks) c) Compare the EOQ and MRP costs. (10 Marks)

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