Please help with following questions Question 4 A set of time varying demand dat

Question

Please help with following questions

Question 4 A set of time varying demand data for a 5 week period is given in Table 3 below. The set up cost per order is 50 units of money. The unit purchase price of item is 5 units of money. The holding cost, also quoted per week, is 1 unit of money. Table 3: Time varying demand data for 5 weeks Week1 Demand 100 40 120 50 90 4 a. Develop the cost matrix of the various combinations of order and holding using the usual approach as presented b. Using the Silver-Meal heuristics, determine the optimal order policy/pattern for the system and determine the optimal cost using this approach.

Explanation / Answer

Given:

a.

=551+251+651+301+501=2255 units of money

B.Silver and Meal found a heuristic method is a production planning methodology which aims to lower the cost and keep the production running at minimum cost.

It is given by the formula,

C(j)=(K+hr2+2hr3+3hr4+4hr5)/j,

In this case, j=5

Therefore, C(5)=(50+1*40+1*120+50+90)/5

= 70

Week 1 2 3 4 5 Demand 100 40 120 50 90 Cost of unit(demand *unit cost)+set up cost+holding cost (100*5)+50+1 (40*5)+50+1 (120*5)+50+1 (50*5)+50+1 (90*5)+50+1 Total cost 551 251 651 301 501

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