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Sigma Electronics produces telephone cameras for cell phone. The production manager would like to create an MRP for their cel

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Answer #1
Economic Part Period= Set Up cost /Inventory Holding cost
In the part
Set up cost-A 200
Holding cost-B 2.5
EPP VALUE(A/B) 80
Period 1 2 3 4 5 6 7 8 9 10 11 12
Net requirement 20 40 40 70 30 10 80 50
Opening Inventory 40 40 20 20
Net requirement-C 20 40 70 30 10 80 50
Inventory carrying Period-D 1 2 3
PP Value (C*D) 80 210
Accumulated PP value 80 290
Inventory carrying Period-D 1 2 3 4
PP Value(C*D) 30 30 320
Accumulated PP value 30 30 60 380
Inventory carrying Period-D 1 2
PP Value(C*D) 100
Accumulated PP value 100
Order Receipt 60 110 80 50
Period 1 2 3 4 5 6 7 8 9 10 11 12
Gross Requirement 20 0 40 0 40 70 30 0 10 80 0 50
On hand at Start 40 40 20 20 40 40 40 10 10
On hand at end 20 20 40 40 40 10 10
Net requirement 20 70 80 50
Order Receipt 60 110 80 50
Order Release 60 110 80 50
Total Holding cost $ 180 X @2.5 450 ( based on hand Inventory at the end of period
Total Set up cost $ 4 X @200 800
Total Cost $ 1250
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