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A requirements plan for a certain type of gears is summarized in the following table. Fixed setup cost for production in any week is 70
A requirements plan for a certain type of gears is summarized in the following table. Fixed setup cost for production in any week is 70 liras and inventory holding cost is 1.5 liras per product per week. Assume that there are no production capacity restrictions. Shortages or backorders are not allowed. (Ignore unit manufacturing costs of gears in your computations.) Week Demand 1 20 2 10 3 30 4 5 5 15 6 20 7 20 8 40 a) (10pts) Determine the weekly production quantities by Least Unit Cost method. What is the cost of this solution? b) (10pts) Determine the weekly production quantities by Part Period Balancing. What is the cost of this solution? c) (5pts) Is any of the solutions in part (a) or part (b) optimal? Explain in one or two sentences
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