Arrange a plan to order from the supplier using Part PeriodBalancing and Least Unit Cost method based on the data. Ordering lead time of the components is 1 period.Calculate the total cost of each method. A manufacturing system faces dynamic demand, which results in lumpy demand for acomponent in a product, which is as follows:PeriodDemand13022035041050640760830925Information from warehouse, there is an initial stock 60 components and the componentsafety stock is 10 units. Ordering cost of the component is IDR. 5000,- while the carryingcost is IDR. 150,- per unit per period. The unit purchase price is IDR. 7000,- and there isan offer from supplier a unit purchase price discount at IDR. 200,- if the order quantity ismore than 100 units. Arrange a plan to order from the supplier using Part PeriodBalancing and Least Unit Cost method. Ordering lead time of the components is 1 period.Calculate the total cost of each method.

The Least Total Cost method is a dynamic lot sizing technique that calculates the order quantity by…

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Operations Management

Calculate the total cost of each method.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Question

Arrange a plan to order from the supplier using Part Period Balancing and Least Unit Cost method based on the data. Ordering lead time of the components is 1 period. Calculate the total cost of each method.

A manufacturing system faces dynamic demand, which results in lumpy demand for a
component in a product, which is as follows:
Period
Demand
1
30
2
20
3
50
4
10
5
0
6
40
7
60
8
30
9
25
Information from warehouse, there is an initial stock 60 components and the component
safety stock is 10 units. Ordering cost of the component is IDR. 5000,- while the carrying
cost is IDR. 150,- per unit per period. The unit purchase price is IDR. 7000,- and there is
an offer from supplier a unit purchase price discount at IDR. 200,- if the order quantity is
more than 100 units. Arrange a plan to order from the supplier using Part Period
Balancing and Least Unit Cost method. Ordering lead time of the components is 1 period.
Calculate the total cost of each method.

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