Lot sizing

A producer with one product faces the following forecasted demand for the next 10 weeks:

week	1	2	3	4	5	6	7	8	9	10
Requirement	30	12	72	11	24	42	35	30	75	68

Assume furthermore that the producer faces a Set-up cost (K) equal to 132 each time production takes place and storage costs (h) of 0.6 per unit per week.

a) Find the cost of the two extreme strategies Lot - for - lot (produce exactly what is needed in each period) and Produce - once (produce everything needed in the first period).

b) Determine the lot sizes using the Silver - Meal heuristic.

c) Determine the lot sizes using the Least Unit Cost technique.

d) Determine the lot sizes using Part Period Balancing technique.

e) Compare the results from the different techniques and comment the solutions.

f) Assume now that production capacity in any period is limited to a maximum production amount of 100. Create a feasible production plan with setups in periods 1, 3, 6, 8 and 10 considering this restriction. What is the cost of this plan? What happens if the maximal production is less than 40?