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HW_16_sol

# HW_16_sol - c Least Unit Cost heuristic Cover week 1 Order...

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Homework-Chapter 16 Problem 1 a) The lead time for a computer is 3+2 = 5 weeks The answers for b,c and d are the last 3 rows of the following table. Month 3 4 5 6 7 8 9 10 11 Demand 210 175 170 125 70 300 Invent. 70 - - - - - Returns 40 20 Net.Requir. 140 175 130 125 70 280 Prod./Order Mboard 140 175 130 125 70 280 Orders DiskDrives 280 350 260 250 140 560 Note: we assume that returns occur at the beginning of each month. Problem 2 a) lot-for-lot scheduling Week 1 st Nov 2 nd Nov 3 rd Nov 4 th Nov Demand 50 83 27 55 Orders 50 83 27 55 Set-up Cost 120 120 120 120 Inventory 0 0 0 0 Total cost =4*120= \$480 b) Economic Order Quantity First we find the demand for the month of November = 50+83+27+55=215 So annual demand = 12*215=2,580 units Also annual holding cost =52*1 (since it’s \$1 per week) So, order size =[ ( 2*2,580*120) / (52) ] 1/2 = 109 units Week 1 st Nov 2 nd Nov 3 rd Nov 4 th Nov Demand 50 83 27 55 Scheduled Rec. 109 109 0 0 Sched. Order 109 109 0 0 0 End.of period Inv 59 (=109-50) 85 (=59+109-83) 58 (=85-27) 3 (=58-55) Setup cost 120 120 Inv. Holding Cost 59 85 58 3

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Total cost = 2*120 + 59+85+58+3 = \$ 445
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Unformatted text preview: c) Least Unit Cost heuristic Cover week 1 : Order 50 units setup cost= 120 and inv. cost= 0 => cost/unit = 120/50=2.4 Cover weeks 1&2 : Order 133 units Setup cost= 120 Inventory cost = (133-50)* 1 = 83 so cost/unit= 203/133= 1. 526 < 2.4 so continue Cover weeks 1&2&3 : Order 160 units Setup cost= 120 Inventory cost = (160-50)* 1 + (110-83)*1 = 137 so cost/unit= 257/160= 1. 61 >1.526 so stop. So we should only cover periods 1 and 2. We start over from week 3. Cover week 3 : Order 27 units Setup cost= 120 Inventory cost = 0 so cost/unit= 120/27= 4.44 Cover weeks 3&4 : Order 82 units Setup cost= 120 Inventory cost = 55 so cost/unit= 175/82= 2.134 < 4.44 so order this quantity. So our total cost will be the cost of ordering at the beginning of week 1 and 3. That is, (120 + 83) + (120 +55) = \$378 which is the lowest among options a,b, and c....
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HW_16_sol - c Least Unit Cost heuristic Cover week 1 Order...

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