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Problem 3: (6.17/224 Silver et.al. (1998) Book)
Consider a company facing a demand pattern and costs as follows:
| Month | Sequential number | Requirements (units) |
| January | 1 | 350 |
| February | 2 | 200 |
| March | 3 | 0 |
| April | 4 | 150 |
| May | 5 | 500 |
| June | 6 | 600 |
| July | 7 | 450 |
| August | 8 | 350 |
| September | 9 | 200 |
| October | 10 | 0 |
| November | 11 | 150 |
| December | 12 | 200 |
| | Total | 3150 |
Given the fixed ordering cost A = $50, carrying cost r (per month) $1.05, unit variable cost v = $65.00/ unit.
a/ Construct a replenishment schedule and calculate the associated costs using the Fixed Economic Order Quantity method.
b/ Repeat using the Wagner Whitin algorithm.
c/ Repeat using the Silver Meal heuristic.
d/ Repeat using the Least Unit Cost method.
e/ Repeat using the Part period Balancing method.
f/ Repeat using the Period Ordering Quantity method.
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