Please find below filled up NRP table as required : Order qty”Lot-for-Lot, Lead
ID: 373948 • Letter: P
Question
Please find below filled up NRP table as required :
Order qty”Lot-for-Lot, Lead time : 1 week
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
20
30
30
70
20
10
80
40
On hand at beginning of period : 40
40
20
20
0
0
0
0
0
0
0
0
0
On hand at end of period
20
20
0
0
0
0
0
0
0
0
0
0
Order receipt
0
0
10
0
30
70
20
0
10
80
0
40
Order release
0
10
0
30
70
20
0
10
80
0
40
0
It is to be noted that:
Under such situation . Order receipt = Gross requirement – On hand at beginning of period
Since Lead time = 1 week, Order receipt for period t = Order Release for period t-1
“On hand at end of period “ = Gross requirement – On hand at beginning of period – Order receipt
On hand at end of period = On hand at beginning of period – Gross requirement
We presume that set up cost is incurred everytime an order is released
There are 7 numbers of Order Releases .
Therefore , total set up cost = $200 x 7 = $1400
Given, Holding cost = $2.50/unit / week
There are 20 + 20 = 40 units which are held up in inventory for week. Therefore total holding cost = $2.5 x 40 = $100
Hence, Total relevant cost = Gross Holding cost + Gross Set up cost = $1400 + $100 = $1500
TOTAL RELEVANT COST = $1500
Order qty”Lot-for-Lot, Lead time : 1 week
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
20
30
30
70
20
10
80
40
On hand at beginning of period : 40
40
20
20
0
0
0
0
0
0
0
0
0
On hand at end of period
20
20
0
0
0
0
0
0
0
0
0
0
Order receipt
0
0
10
0
30
70
20
0
10
80
0
40
Order release
0
10
0
30
70
20
0
10
80
0
40
0
Explanation / Answer
MGMT 626: Fall 2017 Homework: Chapter 14 Homework Score: 072 of 1 pt HW Score: 71 21%, 285 of 4 pts Problem 14.19 6 7 89 10 1 12 10 80 30 30 70 20 40 Holding cost $2 50/unit/week, setup cost 34 5 6 7 89 10 11 12 30 20 30 70 20 10 80