Question

24. Given 150 units of on hand inverntory, a lead time of one period, an ordering cost of $400, and a holding cost of S$2 per unit per period, determine the lowest cost lot sizing technique among Lot for Lot, and EOQ Use the gross requirements as given in the tables. Calculate here: Lot for Lot Period # 250 350 200 406 450 Gross 170 165 Requirement On Hand Inventory Requirements order receipts order release Net Planned Planned EoQ Period # Gross 200 170 165 140 250 450 350 Requirement On Hand Inventory Net Requirements Planned order receipts Planned order release

please answer the question asap.

Answer 1

L4L

Period	1	2	3	4	5	6	7
Gross requirements	200	165	170	140	250	350	450
Scheduled receipts	0	0	0	0	0	0	0
Inv on hand	150	0	0	0	0	0	0
Net requirements	50	165	170	140	250	350	450
Planned order receipts	50	165	170	140	250	350	450
Planned order releases	165	170	140	250	350	450	0

Inventory holding cost = Avg inventory x cost of holding one unit per period

= 150/2 x2 = 150

Ordering cost = 6x400 =2400

Total cost = 2400+150 =2550

2. EOQ = [ 2 x demand x ordering cost / holding cost for entire duration ]^1/2

= [ 2 x 1725 x400/2x7]^1/2 = 314

Period	1	2	3	4	5	6	7
Gross requirements	200	165	170	140	250	350	450
Scheduled receipts	0	0	0	0	0	0	0
Inv on hand Beginning	150	0	149	293	153	217	181
Inv on hand ending	0	149	293	153	217	181	45
Net requirements	50	165	21	0	97	133	269
Planned order receipts	50	314	314	0	314	314	314
Planned order releases	314	314	0	314	314	314	0

Inventory cost = 2181/2 x2 = 2181

Order cost = 400x5 =2000

Total cost = 2181+2000 =4181