A component used in a manufacturing facility is ordered from an outside supplier. Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks is The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint: Express h as the holding cost per thousand units.) a. What ordering policy is recommended by the Silver–Meal heuristic? b. What ordering policy is recommended by the part period balancing heuristic? c. What ordering policy is recommended by the least unit cost heuristic? d. Which method resulted in the lowest-cost policy for this problem?
A component used in a manufacturing facility is ordered from an outside supplier. Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks is The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint: Express h as the holding cost per thousand units.) a. What ordering policy is recommended by the Silver–Meal heuristic? b. What ordering policy is recommended by the part period balancing heuristic? c. What ordering policy is recommended by the least unit cost heuristic? d. Which method resulted in the lowest-cost policy for this problem?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A component used in a manufacturing facility is ordered from an outside supplier. Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks is
The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint: Express h as the holding cost per thousand units.)
a. What ordering policy is recommended by the Silver–Meal heuristic?
b. What ordering policy is recommended by the part period balancing heuristic?
c. What ordering policy is recommended by the least unit cost heuristic?
d. Which method resulted in the lowest-cost policy for this problem?
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