Question

4. Sandy's Cabinet Company uses MRP to schedule its production. Due to the current recession and the need to cut costs, Sandy has targeted the inventory investment area for cost reduction. However, the company does not want to reduce its customer service level in the process. Demand and inventory data for a standard two-drawer file cabinet are given in the following table. Complete an MRP matrix for the cabinet using (a) no lot sizing, (b) minimum of 200, and (c) multiples of 175 lot sizing. Which lot-sizing rule do you recommend? Ordering cost $100 per order Holding cost $1 per cabinet per week Lead time1 period Beginning inventory 150 PERIOD 2 3 4 Demand 145 165 155 135 170