I need the blue boxes filled out. Thanks! Develop a EOQ solution and calculate t
ID: 463495 • Letter: I
Question
I need the blue boxes filled out.
Thanks!
Develop a EOQ solution and calculate total relevant costs for the gross requirements in the following table*. Holding cost = S1.50'unit/week; setup cost = S150; lead time = 1 week; beginning inventory = 40. What is the average demand per week? (enter your responses with 2 decimal places): Q Calculate Economic Order Quantity (EOQ) (enter your responses as whole numbers), Develop a EOQ solution (enter your responses as whole numbers). Setup cost for 12 weeks is {enter your response as a whole number). Carrying cost for 12 weeks is (enter your response as a whole number). The total cost is (enter your response as a whole number).Explanation / Answer
Total demand for 12 periods = 210
Average demand for 12 periods = 17.5
Economic order quantity is given by formula
EOQ = Q* = sqrt{ rac{2*A*S}{H}}
A = average demand = 17.5 units
S = Setup cost = $150
H = Holding cost = $1.50
Q* = sqrt{ rac{2*17.5*150}{1.5}}
Q* = 60 units
The MRP Schedule for the Item by applying EOQ lot sizing method is as follows:
Item
Lot Size: EOQ = 60
LT = 1 wk
Period
1
2
3
4
5
6
7
8
9
10
11
12
Gross Req.
20
0
30
0
40
20
20
0
10
20
0
50
Scheduled receipts
0
0
0
0
0
0
0
0
0
0
0
0
Projected-on-hand
40
20
20
50
50
10
50
30
30
20
0
0
10
Net Requirement
0
0
10
0
0
10
0
0
0
0
0
50
Planned order Receipts
0
0
60
0
0
60
0
0
0
0
0
60
Planned order releases
0
60
0
0
60
0
0
0
0
0
60
0
The projected-on-hand inventory for each period is ending inventory after consuming net requirement.
Total ending inventory or project-on-hand for 12 months = 290 units
Number of setup = 3
Set up cost for 12 months = 3 * $150 = $450
Carrying cost for 12 months = 290 x $1.50 = $43.5
Total cost of for MRP schedule = $493.5
Item
Lot Size: EOQ = 60
LT = 1 wk
Period
1
2
3
4
5
6
7
8
9
10
11
12
Gross Req.
20
0
30
0
40
20
20
0
10
20
0
50
Scheduled receipts
0
0
0
0
0
0
0
0
0
0
0
0
Projected-on-hand
40
20
20
50
50
10
50
30
30
20
0
0
10
Net Requirement
0
0
10
0
0
10
0
0
0
0
0
50
Planned order Receipts
0
0
60
0
0
60
0
0
0
0
0
60
Planned order releases
0
60
0
0
60
0
0
0
0
0
60
0