Question: Consider a company facing a demand pattern and costs as follows: Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sequential 1 2 3 4 5 6 7 8 9 10 11 12 Total number Requirements 20 40 110 120 60 30 20 30 80 120 130 40 800 (units) Given: Fixed ordering cost A = $25.00, carrying cost r (per month) = $0.05 (Carrying costs are very high in this industry) and unit variable cost y = $4.00. Using a three-month decision rule, the replenishment schedule and associated costs are as follows: Month 1 2 3 4 5 6 17 8 9 10 11 12 Total Starting 0 150 110 0 90 30 0 110 80 0 170 40 inventory Replenishment 170 0 0 210 0 0 0 0 290 0 0 800 Requirements 40 110 20 60 30 20 30 12 40 800 Ending 150 110 0 90 110 80 0 170 780 inventory Total replenishment costs: $110.00 Total carrying costs: $156.00 Total replenishment + carrying: $256.00 130 Construct a replenishment schedule and calculate the associated costs using the Fixed Economic Order Quantity method