MSE260_Session_4_2013_Sol

For a 8 unit cost eoq81461 is feasible so we use

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Unformatted text preview: ut total cost at c=\$9. For a \$8 unit cost, EOQ_\$8=1461 is feasible, so we use Q_\$8=1461 to calculate out total cost at c=\$8. For a \$7 unit cost, EOQ_\$7=1561 is infeasible, so we use Q_\$7=1600 to calculate out total cost at c=\$7. Second Step Recall, Total Cost = (Order Cost*Demand)/Q + (Q/2)*Interest *Unit Cost + Unit Cost*Demand Discussion Session #4 2/3 Stanford University Management Science and Engineering Professor Chang & Timucin MS&E 260 – Fall 2013/14 TC(Q=800,\$10) = (200*6400)/800 + (800/2)*0.15*10 + 10*6400 = \$66200 TC(Q=1200,\$9) = (200*6400)/ 1200 + (1200/2)*0.15*9 + 9*6400 = \$59477 TC(Q=1461,\$8) = (200*6400)/1461 + (1461/2)*0.15*8 + 8*6400 = \$52953 TC(Q=1600,\$7)= (200*6400)/1600 + (1600/2)*0.15*7 + 7*6400 = \$46440 The optimal order quantity is Q = 1600 (at \$7 per unit), for a Total Cost = \$46440. 3. First...
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This document was uploaded on 02/05/2014.

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