- A company produces an end item 'F'. One unit of item F can be made by assembling 1 unit of X, 2 units of Y, and 3 units of Z. Each X is made of 2 units of Z and 2 units of A; each Y is assembled using 3 units of B and 1 unit of C. On-hand inventories are 90 units of X and 150 units of Z. Scheduled receipts are 50 units of X at the beginning of week 1, 200 units of Z at the beginning of week 2, and 50 units of C at the beginning of week 1. Lead times for X and C are one week, and lead times for other components are two weeks. Final assembly of F requires one week. 5. You are required to calculate the total inventory cost for component Z during the eight weeks. Note that, for each week, the inventory cost includes a fixed cost and a holding cost. a We assume that the per order fixed cost is $800/order, and the unit holding cost is $1 per item per week. The fixed cost is incurred each time when the firm places an order. More precisely, if the firm places an order at the beginning of a week, then the firm incurs the fixed cost for this week; otherwise, the fixed cost for the week is zero. The holding cost is calculated according to the number of remaining items at the end of each week. For example, if 10 units of component Z are remaining at the end of a week, then the holding cost for this week is 10 x $1 = $10. [4 marks]