The Thrifty Computer Company is trying to decide which of several lot-sizing procedures to use for its MRP system. The following information pertains to one of the typical component parts: (X=27)

Setup cost = $110/order.

Inventory holding cost = $1.30/unit/week.

Current inventory balance = 0 units.

	Week
	1	2	3	4	5	6	7	8
Demand Forecast	2X	50	X	110	3X	25	85	X

1. Apply the EOQ procedure, (only integer multiples of the EOQ can be ordered)
2. Apply the POQ procedure,
3. Apply the PPB lot-sizing procedure,
4. Show the total cost resulting from each procedure.

Calculate inventory carrying cost based on the average inventory on hand at the end of each period. Assume orders are received into the beginning inventory.

3. The following matrix represents a warehouse location problem. There is a fixed cost for opening any of the five possible warehouses, and the cell entries for each customer are the variable costs of serving that customer from each potential warehouse. The variable costs include inbound transportation, outbound transportation, and warehouse operating costs for all the customers requirements. The objective is to determine which warehouses should be used to serve all customers at minimum total cost. There are not capacity restrictions on the potential warehouses, but some warehouses cannot serve some customers. (Chapter 15 Supply Chain Logistics) (30 points)

Warehouses	Fixed	Customers
Possible	Cost	1	2	3	4	5	6	7
A	75	80	20+X	2X	70	50	----	100
B	25	----	70	82	80	78	81	35
C	40	100	85	----	50	3X	66	55
D	68	45	----	65	45+X	76	78	60
E	30+X	55	25+X	76	90	----	49	45
F	70	68	50	90	30+X	55	80	50

Apply the add procedure to solve this warehouse location problem. Determine which warehouse should service each customer and indicate the total cost of your solution.