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A component used in a manufacturing facility is ordered from an outside supplier. Because the component is used in a variety of end products,

 

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. Esti- mated demand (in thousands) over the next 10 weeks is Week 1 2 Demand 22 34 3 32 4 12 5 8 6 44 7 8 54 16 9 76 10 30 The components cost 65 cents each and the interest rate used to compute the hold- ing cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint: Express has the holding cost per thousand units.) a. What ordering policy is recommended by the Silver-Meal heuristic?

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