Develop a lot-for-lot solution and calculate total relevant costs for the gross

Question

Develop a lot-for-lot solution and calculate total relevant costs for the gross requirements in the following table* 1 2 3 4 5 6 7 8 9 10 1 12 60 Period Gross requirements30 40 30 60 20 10 80 Holding cost $3.50/unit/week; setup cost $150; lead time 1 week; beginning inventory 40 Develop a lot-for-lot solution (enter your responses as whole numbers). 1 234 5 6 7 8 9 10 11 12 60 Gross requirements On-hand at beginning of period40 On-hand at end of period Order receipt Order release 30 40 30 60 20 10 80 The total cost is enter your response as a whole number).

Explanation / Answer

Let us consider the the table:

Lot-for -Lot Technique:

Therefore the total operation cost is only foer setup cost where eight setups needed associated with each order

= (8) (150)

= $ 1200.

Hence,the total cost is $1200.

Periods 1 2 3 4 5 6 7 8 9 10 11 12 Gross Requirements 30 35 40 0 30 60 20 0 10 80 0 60

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