A component used in a manufacturing facility is ordered from an outside supplier.

Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks is Week 1 2 3 4 5 6 7 8 9 10 Demand 22 34 32 12 8 44 54 16 76 30 The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:

Express h as the holding cost per thousand units.)

a. What ordering policy is recommended by the Silver–Meal heuristic?

b. What ordering policy is recommended by the part period balancing heuristic?

c. What ordering policy is recommended by the least unit cost heuristic?

d. Which method resulted in the lowest-cost policy for this problem?