The attached spreadsheet contains demand data for ten weeks. You are to solve the following replenishment problem. Decide how much to order each week to minimize the total cost, which includes fixed charges for ordering and holding cost. If an order is made, there is a fixed charge paid for that order, regardless of the quantity. Inventory held at the end of the week incurs a holding cost per unit. There is a minimum amount of inventory that must be on hand each week. If an order is placed in a period, the order amount must be at least the minimum order quantity (MOQ). In this problem there is no longer a fixed charge for placing an order. Rather, there is a quantity discount, as shown in the spreadsheet. For example, if you order between 5 and 9 items, the cost per item is $2. But if you order between 10 and 14, the cost per item is $1. The attached spreadsheet includes all of the data that you need as well as an example solution. (This example solution is not necessarily optimal. You need to find the optimal solution.

5 minimum order quantity (MOQ) Quantity discount schedule minimum order amount 5 10 15 $2 $1.00 $0.50 price per unit Week Demand 0 1 2 3 Inventory Minimum held at Holding inventory Order end of cost per Cost of goods Holding is order requirement amount week unit purchased cost feasible? 20 10 1 6 16 1$ 12$ 16 10 1 0 6 1 $ $ 6 10 1 10 6 1 $ 10 $ 6 0 0 0 6 1 $ $ 6 0 0 0 6 1 $ $ 6 15 1.5 11 2 1 $ 11$ 2 20 2 20 2 1 $ 10$ 2 20 2 20 2 1 $ 10$ 2 0 0 0 2 1 $ $ 2 10 1 8 0 1$ 16 $ 4 5 6 7 8 9 10 TOTAL COST $ 117