Product A has an MPS with 120 units to be produced in weeks 2 ,4, 5, 8, 10, 11 and 13. The inventory information and structure is as follows:

The supplier of F has offered a reduced price if their order quantity is in multiples of 1000. The current price of F is $50 and holding cost is 1% of the value per week. Assuming this quarter is representative of a year, what much the price reduction breakeven point for us to be indifferent on the changed order quantity? Currently, each order placed costs $500.

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Data category B L4L FOQ=700 Lot sizing rule FOQ=700 L4L EOQ = 660 1 weeks 3 weeks 3 weeks 4 weeks Lead time 2 weeks Safety stock 50 150 week 2 Scheduled 450 week 2 700 week 1 None 1,400 week 1 receipts Beginning inventory 125 235 750 ш A D(2) C(3) B(2) E(1) F(2) F(1) D(1) E(1) F(2)