The total cost is: Develop a lot-for-lot solution and calculate total relevant c

Question

The total cost is:

Develop a lot-for-lot solution and calculate total relevant costs for the gross requirements in the following table*. Period 12 3 4 5 6 7 8 910 11 12 Gross requirements20 30 30 70 30 20 80 50 Holding cost- $1.50/unit/week; setup cost $200; lead time 1 week; beginning inventory 4. Develop a lot-for-lot solution (enter your responses as whole numbers). Period Gross requirements On-hand at beginning of period40 1 2 34 5 6 789 10 11 12 20 30 30 70 30 20 80 50 Order receipt Order release

Explanation / Answer

The MRP table is gven below.

Total cost = Inventory holding cost + set up cost

= holding cost of 20 units x 2 weeks + set up cost of 7 orders

= 20x2x1.5 + 200x7 =1460

Period 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirement 20 30 30 70 30 20 80 50 On hand at beginning 40 30 30 70 30 20 80 50 On hand at end 20 20 0 0 0 0 0 0 0 Order receipt 10 30 70 30 20 80 50 order release 10 30 70 30 20 80 0 50

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