Question

Develop a lot-for-lot solution and calculate total relevant costs for the gross requirements in the following table*. Period 1 6 11 12 2 4 7 8 10 Gross requirements 30 70 30 10 80 20 30 60 Holding cost= $3.50/unit/week; setup cost = $150; lead time= week; beginning inventory 40. Develop a lot-for-lot solution (enter your responses as whole numbers). Period 1 2 3 6 7 10 12 4 8 11 30 70 30 Gross requirements 20 30 10 80 60 On-hand at beginning of period 40 On-hand at end of period Order receipt Order release

The total cost is $____ )enter your response as a whole number)

Answer 1

The plan is shown below. We assume that the holding cost is charged based on the ending inventory for a period and there is not safety stock requirement.

Period	1	2	3	4	5	6	7	8	9	10	11	12
Gross req	20		30		30	70	30		10	80		60
On hand beg	40	20	20	0	0	0	0	0	0	0	0	0
On hand end	20	20	0	0	0	0	0	0	0	0	0	0
Order rec		0	10	0	30	70	30	0	10	80	0	60
Order rel		10		30	70	30		10	80		60
Holding cost	70	70	0	0	0	0	0	0	0	0	0	0
Ordering cost		150		150	150	150		150	150		150	150
Total	1340

Total cost is 1340