MSE260_Session_4_2013_Sol

C the total cost can be written as c t so the optimal

Info iconThis preview shows page 1. Sign up to view the full content.

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

Unformatted text preview: ng cost is: . c) The total cost can be written as: C T So the optimal T is: Discussion Session #4 √ K hAA hBB T T 2 √ 1/3 Stanford University Management Science and Engineering Professor Chang & Timucin MS&E 260 – Fall 2013/14 The order quantities for A and B become: d) The new total cost is: C(T)= ( ) ( ) And the original total cost is: 212953. Since we lost the flexibility of planning each product separately, we have a higher total cost in this situation. 2. First Step, we calculate our optimal Economic Order Quantities at different per-unit purchasing costs: EOQ_$10 =√ EOQ_$9 =√ EOQ_$8 =√ EOQ_$7 =√ = 1306.4 1306 = 1377.1 1377 = 1460.6 1461 = 1561.4 1561 For a $10 unit cost, EOQ_$10 = 1306 is infeasible, so we use Q_$10=800 to calculate our total cost at c=$10. For a $9 unit cost, EOQ_$9=1377 is infeasible, so we use Q_$9=1200 to calculate o...
View Full Document

This document was uploaded on 02/05/2014.

Ask a homework question - tutors are online