Question

1. The time-phased net requirements for the base assembly in a table lamp over the next six weeks are:

Week	1	2	3	4	5	6
Requirements	335	240	180	340	320	200

The setup cost for the construction of the base assembly is $200, and the holding cost is $0.30 per assembly per week.

1. What lot sizing do you obtain from the EOQ formula?
2. Determine the lot sizes using the Silver–Meal heuristic.
3. Determine the lot sizes using the least unit cost heuristic.
4. Determine the lot sizes using part period balancing.
5. Determine the lot size using the Wagner–Whitin algorithm.
6. Compare the holding and setup costs obtained over the six periods using the policies found in parts (a) through (e) with the cost of a lot-for-lot policy.

Answer 1

ANSWER :- (a) first we have to understand what is EOQ.

EOQ is known as Economic Order Quantity. In accounting EOQ is the order quantity that minimizes the total holding costs & ordering costs.

here we have to find lot size from eoq formula.

set up cost is $200.

holding cost is $0.30 per assembly per week.

EOQ =

Where

D = annual requirement of lot

= 335+240+180+340+320+200 *52 week per year/6 week

= 3997.

K = no of week

= 6

h = holding cost per unit

= $0.30*52

=15.6 units /year

so EOQ =^2*3997*6/15.6

= 374.61 unit/ year

= 375 units/year ( rounded off)

SO WITH EOQ Formula lot size is 375 unit.