Question 4

A company forecast weekly demand for certain equipment as follows,

Week	1	2	3	4	5	6	7	8	9	10	11
Demand	8	10	7	6	15	5	4	12	9	14	5

Week	12	13	14	15	16	17	18	19	20	21	22
Demand	7	18	4	11	10	6	8	5	16	14	4

Each equipment cost $100, it costs $600 to place an order and get delivery, and holding cost is 10% of the value a week. Design a reasonable ordering policy for the equipment. (Part a-d)

a)For the first order, how many weeks of demand should be combined?

Group of answer choices

4

2

3

5

None of them

b)For the first combined order, what is the average weekly variable cost (i.e., order cost and holding cost)?

Group of answer choices

$305.00

$325.00

$390.00

$250.00

None of them

c)How many combined orders could we decide now with the available demand data?

Group of answer choices

5

3

4

6

None of them

d)How much is the average weekly variable cost (i.e., order cost and holding cost) for all the combined orders with the available demand data?

Group of answer choices

$327.11

$303.65

$348.64

$362.13

None of them