hw5sol

# hw5sol - ISE 410 Solution 5 Due on 1 Consider an item with...

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10/25/06 ISE 410 Solution # 5 Due on 11/01/06 1. Consider an item with the following properties: A = \$50; C = \$4.00/unit; i = 0.36 \$/\$/year. At time 0, the inventory has dropped to zero and replenishment with negligible lead-time must be made. The demand pattern for the next 12 months is: Month 1 2 3 4 5 6 7 8 9 10 11 12 Demand 100 75 50 100 50 40 80 80 0 50 75 100 All the requirements of each month must be available at the beginning of the month. Replenishments are restricted to the beginning of each month. Using each of the following methods, develop a list of orders to meet the demand. In each case, there should be no inventory at the end of month 12. a) Fixed EOQ (rounded to the integer number of months of supply) D = 800, h = (0.36)(4) = 1.44\$/unit/year = 0.12\$/unit/month. Q* = h AD / 2 = 44 . 1 / ) 800 )( 50 ( 2 = 236 Period 1 2 3 4 5 6 7 8 9 10 11 12 Demand 100 75 50 100 50 40 80 80 0 50 75 100 Order Receipts 225 0 0 270 0 0 0 205 0 0 0 100 Ending Inventory 125 50 0 170 120 80 0 125 125 75 0 0 TC = (4)(50) + (1.44)(870/12) = 200 + 104.4 = \$304.4

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hw5sol - ISE 410 Solution 5 Due on 1 Consider an item with...

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