Question

please do the work on paper and not on excel. i need to show all work to get full credit on this homework!!!!

3. The Harmon Music Company produces a variety of wind instruments in its plant in Joliet, Illinois. Because the company is relatively small, it would like to minimize the amount of money tied up in inventory, by matching production with demand to the extent permissible. One of the instruments produced is the model 85C trumpet, which retails for $400. Based on orders from music stores around the country and online sales, the anticipated demand for an eight-week planning horizon are 62,52, 42, 22, 36, 92,55, 24. Assume that h - $1/unit/week and A = $100/order. Find the optimal production schedule. How many trumpets are ordered in week 6? Cons) E chovo

Answer 1

EOQ for the order = [ 2 x demand x order cost / cost of holding a unit for specified period]^1/2

= [ 2 x385 x100 / 1x8]^1/2 = 98 units

production schedule

Week	1	2	3	4	5	6	7	8
Demand	62	52	42	22	36	92	55	24
Beginning inventory	0	36	82	40	18	80	86	31
Ending inventory	36	82	40	18	80	86	31	7
Net reuirement	62	16	0	0	18	12	0	0
Planned order receipt	98	98	0	0	98	98	0	0
Planned order releases	98	98	0	0	98	98	0	0

The trumpets ordered in week 6 would be 98.