Question

What will the total cost be? (nearest whole number)

Develop a lot-for-lot solution and calculate total relevant costs for the gross requirements in the following table". Period 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirements 20 40 40 60 30 10 80 50 "Holding cost = $3.50/unit/week; setup cost = $200; lead time = 1 week; beginning inventory = 40. Develop a lot-for-lot solution (enter your responses as whole numbers). Period 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirements 20 40 40 60 30 10 80 50 On-hand at beginning of period eriod 40 DONNNDD D D D D D 400 I On-hand at end of period Order receipt nnnnnnnnnnn Order release Enter your answer in the edit fields and then click Check Answer.

Answer 1

Answer: Total cost is $140+ $1400= $1540

Period		1	2	3	4	5	6	7	8	9	10	11	12	Total cost
	Gross requirements GR	20	0	40	0	40	60	30	0	10	80	0	50
	Projected inventory on hand PIOH	20	20	0	0	0	0	0	0	0	0	0	0
IOH= 140	inventory on hand IOH	40	20	20	0	0	0	0	0	0	0	0	0
	Net requirements NR	-20	-20	20	0	40	60	30	0	10	80	0	50
Q = L4L	Planned order receipts (PR)	0	0	20	0	40	60	30	0	10	80	0	50
Lead Time LT=1	Planned order releases POR	0	20	0	40	60	30	0	10	80	0	50	0
	Holding cost	70	70	0	0	0	0	0	0	0	0	0	0	140
	setup cost (whenever there is new order reciept)	0	0	200	0	200	200	200	0	200	200	0	200	1400

repeat these steps for every week

	steps
step 1	IOH=	PIOH of last week
step 2	NR=	GR -IOH
step 3	PR=	in L4L PR=NR
step 4	projected inventory on hand PIOH=	IOH+PR-GR
step 5	POR=	PR of preceding week
step 6 (After completing whole MRP)	Holding cost=	3.5$*PIOH

Excell Formula

C

D

E

F

G

H

I

J

K

labor cost

material cost

N

O

128

Period

1

2

3

4

5

6

7

8

9

10

11

12

Total cost

129

Gross requirements GR

20

0

40

0

40

60

30

0

10

80

0

50

130

Scheduled receipts SR

0

0

0

0

0

0

0

0

0

0

0

0

131

Projected inventory on hand PIOH

=D132+D134-D129

=E132+E134-E129

=F132+F134-F129

=G132+G134-G129

=H132+H134-H129

=I132+I134-I129

=J132+J134-J129

=K132+K134-K129

=L132+L134-L129

=M132+M134-M129

=N132+N134-N129

=O132+O134-O129

132

IOH= 140

inventory on hand IOH

40

=D131

=E131

=F131

=G131

=H131

=I131

=J131

=K131

=L131

=M131

=N131

133

Net requirements NR

=D129-D132

=E129-E132

=F129-F132

=G129-G132

=H129-H132

=I129-I132

=J129-J132

=K129-K132

=L129-L132

=M129-M132

=N129-N132

=O129-O132

134

Q = L4L

Planned order receipts (PR)

0

0

20

=G133

=H133

=I133

=J133

=K133

=L133

=M133

=N133

=O133

135

Lead Time LT=1

Planned order releases POR

=E134

=F134

=G134

=H134

=I134

=J134

=K134

=L134

=M134

=N134

=O134

=P134

136

Holding cost

=3.5*D131

=3.5*E131

=3.5*F131

=3.5*G131

=3.5*H131

=3.5*I131

=3.5*J131

=3.5*K131

=3.5*L131

=3.5*M131

=3.5*N131

=3.5*O131

=SUM(D136:O136)

setup cost (whenever there is new order reciept)

0

0

200

0

200

200

200

0

200

200

0

200

=SUM(D137:O137)