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 break even point for us to be indifferent on the changed order quantity? Currently, each order placed costs $500.

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