A component used in a manufacturing facility is ordered from an outside supplier

Question

A component used in a manufacturing facility is ordered from an outside supplier. The time-phased requirements for the component over the next 7 weeks are 15, 20, 16, 10, 20, 14, and 18. Current inventory of this item is 8, and the ending inventory should be 7 Assume a holding cost of $2 per week and a setup cost of $40. 1) Determine the order policy for this item over the next 7 weeks based on Silver-Meal heuristic. 2) Assume there is capacity constraint to the lot sizing a. Suppose that the maximum order size is 10 per week. Does there exist a feasible solution? b. Suppose that the maximum order size is 20 per week. Use lot-shifting technique to obtain a feasible solution (without using holding and setup cost). c. Suppose that the maximum order size is 20 per week. Improve the solution obtained in Part (b)

Explanation / Answer

Hi Good Moring,

Greetings,

The Silver–Meal heuristic is a forward method that requires determining the average cost per period as a function of the number of periods the current order is to span and stopping the computation when this function first increases.

K: the setup cost per lot produced = $ 40

h: holding cost per unit per week = $2

C(T) : the average holding and setup cost per period if the current order spans the next T periods. Let (r1, r2, r3, …….,rn) be the requirements over the 7 weeks.

     YES.

b. Suppose the maximum order size 20 per week. Use lot shifting technique to obtain a feasible solution.

c. Suppose the maximum order size 20 per week. Improve the solution obtained in part b.

     We can reduce the delivery schedule and total cost shall be optimized with that.

K 40 h 2 Calculations j 1 2 3 4 5 6 7 rj 15 20 16 10 20 14 18 H. Ord. Periodic Cost Cost Cost Week-1 15 30 40 70 Week-2 35 20 110 40 75 Week-3 51 36 16 206 40 82 Week-4 61 46 26 10 286 40 81.5 Week-5 81 66 46 30 20 486 40 105.2 Week-6 95 80 60 44 34 14 654 40 115.6667 Week-7 113 98 78 62 52 32 18 906 40 135.1429

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