Question
A company will purchase baskets from its supplier for the dishwasher it produces. Demand amounts, ordering costs, unit purchasing costs and unit in stock carrying
A company will purchase baskets from its supplier for the dishwasher it produces. Demand amounts, ordering costs, unit purchasing costs and unit in stock carrying costs for the company's dishwasher basket are given in the table below. Orders are given in batches. Due to the lack of stock space, the maximum amount that the company can carry in stock is 50. No sell-outs are allowed for this product where the initial stock level is zero. Since the company management prefers a stock policy that will make its total cost the lowest, find the amount of order that must be given in each period.
1 | 2 | 3 | 4 | |
request | 20 | 15 | 15 | 40 |
Cost of ordering | 10 | 8 | 12 | 9 |
Unit production cost | 1 | 2 | 4 | 6 |
Unit inventory holding cost | 1 | 2 | 2 | 2 |
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