{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Hw1-Solutions - HW 1 Solution 1(20 pts D = 5000/yr C =...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
HW 1 Solution 1. (20 pts) D = 5000/yr, C = 600/unit, 1 year = 300 days, i = 0.06, A = 300 Current ordering amount Q = 200 (a) T * = (b) Total(Holding + Setup) cost would be (c) The optimum cost would be (d) T * is 12 days. The closest power of two is 16 days(16/300 yr). The power of two on the other side of 12 days is 8 days(8/300 yr). 2. (20 pts) D = 200/month = 2400/yr, A = (100+55)*1.5 = 232.5 P = 50/hr = 50*6*20*12/yr = 72000/yr, i = 0.22, C = 2.50 (a) (b) (c) 3. (20 pts) (a) EOQ of A : EOQ of B : EOQ of C :
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Therefore, optimal order quantity is 4000 with source C. (b) Holding + Setup cost = (c) Cycle Time = 4000/20000 = 0.2 year = 2.4 months. Replenishment lead time = 3 months. Reorder point = 3/2.4 X 4000 = 5000 1000 units is reorder point It is interesting to interpret the above result for part (c) in terms of the definition of the Inventory Position IP(t) introduced in class during the discussion of the Stochastic Inventory Control theory. So, remember that IP(t) = OHI(t) + O(t) – BO(t) (1) where OHI(t) denotes the on‐hand‐inventory at time t; O(t) denotes the “pipeline” inventory at time t (i.e., material ordered but not received yet); BO(t) denotes the backorders at time t. Also, let Q l = l D denote the demand experienced over a replenishment lead time interval l. In our case, this quantity is Q l = (3/12)x20000 = 5000. Since we want to have no shortages, BO(t) = 0 for all t (2) Consider also the OHI(t) at any time t, and notice that at time t+ l ,
Image of page 2
OHI(t+ l ) – BO(t+ l ) = OHI(t) + O(t) – Q l (3)
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern