Question

Given this net requirements schedule for a product for the next six weeks, if it cost...

Given this net requirements schedule for a product for the next six weeks, if it cost $3,000 to set up the production line to produce this product and it costs $6 to carry one unit of the product in inventory for one week, develop a schedule of completed production lots for the product and compute the cost of your schedule by using these methods:

Week (Net Requirements)

1 (500

2 (700)

3 (500)

4 (700)

5 (400)

6 (600)

a. Lot-for-lot (LFL)

b. Economic order quantity (EOQ).

c. Period order quantity (POQ).

You may disregard the effects of initial inventory and safety stock on your calculations.  

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