Solary is a solar-energy solutions provider headquartered in Germany applying its technology to energy-related products supplying from residential equipment to ground-based power plants. Margaret is in charge of the solar panels' production planning based on a recent order from a client in Italy with scheduled deliveries for the next six months.

Month	Forecasted Demand (units)
1	1000
2	636
3	994
4	1117
5	688
6	918

Solary's cost controller, Mr. Richardson, reported recently that the holding cost per solar panel is 1.25 euros per month, and the production setup cost per production run is 925 euros. He also informs that there's no inventory on hand to consider for setting up this production schedule.

Margaret wants to set the starting point to compare all results with the company's current total cost (setup + inventory holding costs). Based on the operation manager estimations, the customized schedule should contemplate production in months 1, 4, and 6. This means that the month 1 production run will include the demand of months 1, 2, and 3; the month 4 production run will include the demand of months 4 and 5, and the last production run will only include production needed to satisfy month 6 demand.

PART 1) What would be Month 1 holding cost of implementing this customized heuristic?

PART 2) What would be the total cost (setup + inventory holding costs) of implementing this customized heuristic?

PART 3) Using a lot-for lot heuristic, how many units should Solary be producing on month 3?

PART 4) What would be the cost of holding inventory on Month 6?

PART 5) What is the total cost for producing the ordered units?

PART 6) Seeking for a better solution Margaret come up with a different approach. She decides to try the FOQ heuristic calculating first the optimal production quantity based on this client's average demand. Note that the company allows this model to have excess inventory at the end of the production planning period because Solary can sell the same panels to different customers with similar needs in the upcoming months.

What's the total inventory holding cost using this heuristic? To calculate your answers, please make sure to round your FOQ to the nearest integer considering that you can't have half a solar panel! What is the total cost?

PART 7) Margaret knows there's a chance to get a better result using the Silver-meal heuristic.

What would be the total cost in this case?