OPERATIONS AND SUPPLY CHAIN MANAGEMENT 2022
ASSIGNMENT 6
Note: Answer all numerical questions up to three decimal places
The demand for 7 months is 500, 600, 800, 1200, 1400, 700 and 800. C0 = 100 and
Cc = 2/unit/year.
1. The ordering costs for 7 months using lot for lot heuristic is ------- (Ans: 700)
2. The inventory costs for 7 months using lot for lot heuristic is -------- (Ans: 500)
3. The total cost is ------- (Ans: Range 1200)
Solutions for questions 1,2,3:
1. Ordering cost = 7*100 = 700
2. Inventory cost = (2/12)*(6000/2) = 500
3. Total cost = 700 + 500 = 1200
The demand for 8 months is 600, 800, 1200, 1000, 1300, 900, 700 and 1200. C0 =
200 and Cc = 3/unit/year.
4. The first lot size using Part period balancing is ------------ (Ans: 600)
5. The second lot size using Part period balancing is ------------ (Ans: 800)
6. The first lot size using Silver-Meal heuristics is ------------ (Ans: 600)
7. The second lot size using Silver-Meal heuristics is ------------ (Ans: 800)
Solutions for questions 4,5,6,7:
4. Part period balancing:
When Q=600, avg inv = 300, CC = 300/4 = 75
When Q=1400, avg inv = 1500, CC = 375 (>200)
75 is close to 200. Hence first lot size = 600
5. When Q=800, avg inv = 400, CC = 400/4 = 100
When Q=2000, avg inv = 2200, CC = 550 (>200)
100 is close to 200. Hence second lot size = 800
6. Silver Meal heuristic:
When Q=600, avg inv = 300, CC = 300/4 = 75, TC = 275; per period cost = 275/1 = 275.
When Q=1400, avg inv = 1500, CC = 375, TC = 575; per period cost = 575/2 = 287.5
275 is lesser. Hence first lot size = 600
7. When Q=800, avg inv = 400, CC = 400/4 = 100, TC = 300; per period cost = 300/1 = 300.
When Q=2000, avg inv = 2200, CC = 550, TC = 750; per period cost = 750/2 = 375
300 is lesser. Hence second lot size = 800
Consider the four-item disaggregation problem with D1 = 200, D2 = 300, D3 = 200, D4 =
400 and P= 1500. Assume I1 = 100, I2 = 200, I3 = 150 and I4 = 250. Assume t 1, t2, t3, and t4
be the start times of production of items.
8. The maximum value of t1, t2, t3, t4should be respectively
