Problem 2:

a.
Economic Order Quantity
Period 1 2 3 4 5 6 7
Beginning inventory 0 109 69 88 97 37 7
Demand 20 40 110 120 60 30 20
Ordering (setup) cost/order $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Carrying cost/unit/period $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20
Order quantity (lotsizes) 129 0 129 129 0 0 129
Ending inventory 109 69 88 97 37 7 116
Ordering cost $25.00 $0.00 $25.00 $25.00 $0.00 $0.00 $25.00
Carrying cost $21.80 $13.80 $17.60 $19.40 $7.40 $1.40 $23.20
Total period cost $46.80 $13.80 $42.60 $44.40 $7.40 $1.40 $48.20

b.
Wagner–Whitin algorithm
Period 1 2 3 4 5 6 7
Beginning inventory 0 40 0 0 60 0 50
Demand 20 40 110 120 60 30 20
Ordering (setup) cost/order $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Carrying cost/unit/period $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20
Order quantity (lotsizes) 60 0 110 180 0 80 0
Ending inventory 40 0 0 60 0 50 30
Ordering cost $25.00 $0.00 $25.00 $25.00 $0.00 $25.00 $0.00
Carrying cost $8.00 $0.00 $0.00 $12.00 $0.00 $10.00 $6.00
Total period cost $33.00 $0.00 $25.00 $37.00 $0.00 $35.00 $6.00

c.
Silver–Meal heuristic
Period 1 2 3 4 5 6 7
Beginning inventory 0 40 0 230 110 50 20
Demand 20 40 110 120 60 30 20
Ordering (setup) cost/order $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Carrying cost/unit/period $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20
Order quantity (lotsizes) 60 0 340 0 0 0 0
Ending inventory 40 0 230 110 50 20 0
Ordering cost $25.00 $0.00 $25.00 $0.00 $0.00 $0.00 $0.00
Carrying cost $8.00 $0.00 $46.00 $22.00 $10.00 $4.00 $0.00
Total period cost $33.00 $0.00 $71.00 $22.00 $10.00 $4.00 $0.00

d.
Least Unit Cost
 Period 1 2 3 4 5 6 7
Beginning inventory 0 150 110 0 60 0 50
Demand 20 40 110 120 60 30 20
Ordering (setup) cost/order $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Carrying cost/unit/period $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20
Order quantity (lotsizes) 170 0 0 180 0 80 0
Ending inventory 150 110 0 60 0 50 30
Ordering cost $25.00 $0.00 $0.00 $25.00 $0.00 $25.00 $0.00
Carrying cost $30.00 $22.00 $0.00 $12.00 $0.00 $10.00 $6.00
Total period cost $55.00 $22.00 $0.00 $37.00 $0.00 $35.00 $6.00

e.
Part-Period Balancing
Period 1 2 3 4 5 6 7
Beginning inventory 0 40 0 120 0 80 50
Demand 20 40 110 120 60 30 20
Ordering (setup) cost/order $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Carrying cost/unit/period $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20
Order quantity (lotsizes) 60 0 230 0 140 0 0
Ending inventory 40 0 120 0 80 50 30
Ordering cost $25.00 $0.00 $25.00 $0.00 $25.00 $0.00 $0.00
Carrying cost $8.00 $0.00 $24.00 $0.00 $16.00 $10.00 $6.00
Total period cost $33.00 $0.00 $49.00 $0.00 $41.00 $10.00 $6.00

f.
Period Order Quantity
Period 1 2 3 4 5 6 7
Beginning inventory 0 40 0 120 0 30 0
Demand 20 40 110 120 60 30 20
Ordering (setup) cost/order $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Carrying cost/unit/period $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20
Order quantity (lotsizes) 60 0 230 0 90 0 50
Ending inventory 40 0 120 0 30 0 30
Ordering cost $25.00 $0.00 $25.00 $0.00 $25.00 $0.00 $25.00
Carrying cost $8.00 $0.00 $24.00 $0.00 $6.00 $0.00 $6.00
Total period cost $33.00 $0.00 $49.00 $0.00 $31.00 $0.00 $31.00
ty
8 9 10 11 12 Totals
116 86 6 15 14
30 80 120 130 40 800
$25.00 $25.00 $25.00 $25.00 $25.00
$0.20 $0.20 $0.20 $0.20 $0.20
0 0 129 129 129 903
86 6 15 14 103
$0.00 $0.00 $25.00 $25.00 $25.00 $175.00
$17.20 $1.20 $3.00 $2.80 $20.60 $149.40
$17.20 $1.20 $28.00 $27.80 $45.60 $0.00

hm
8 9 10 11 12 Totals
30 0 120 0 40
30 80 120 130 40 800
$25.00 $25.00 $25.00 $25.00 $25.00
$0.20 $0.20 $0.20 $0.20 $0.20
0 200 0 170 0 800
0 120 0 40 0
$0.00 $25.00 $0.00 $25.00 $0.00 $150.00
$0.00 $24.00 $0.00 $8.00 $0.00 $68.00
$0.00 $49.00 $0.00 $33.00 $0.00 $218.00

8 9 10 11 12 Totals
0 80 0 0 40
30 80 120 130 40 800
$25.00 $25.00 $25.00 $25.00 $25.00
$0.20 $0.20 $0.20 $0.20 $0.20
110 0 120 170 0 800
80 0 0 40 0
$25.00 $0.00 $25.00 $25.00 $0.00 $125.00
$16.00 $0.00 $0.00 $8.00 $0.00 $114.00
$41.00 $0.00 $25.00 $33.00 $0.00 $239.00
 8 9 10 11 12 Totals
30 0 120 0 0
30 80 120 130 40 800
$25.00 $25.00 $25.00 $25.00 $25.00
$0.20 $0.20 $0.20 $0.20 $0.20
0 200 0 130 40 800
0 120 0 0 0
$0.00 $25.00 $0.00 $25.00 $25.00 $150.00
$0.00 $24.00 $0.00 $0.00 $0.00 $104.00
$0.00 $49.00 $0.00 $25.00 $25.00 $254.00

8 9 10 11 12 Totals
30 0 120 0 40
30 80 120 130 40 800
$25.00 $25.00 $25.00 $25.00 $25.00
$0.20 $0.20 $0.20 $0.20 $0.20
0 200 0 170 0 800
0 120 0 40 0
$0.00 $25.00 $0.00 $25.00 $0.00 $125.00
$0.00 $24.00 $0.00 $8.00 $0.00 $96.00
$0.00 $49.00 $0.00 $33.00 $0.00 $221.00

y
8 9 10 11 12 Totals
30 0 120 0 40
30 80 120 130 40 800
$25.00 $25.00 $25.00 $25.00 $25.00
$0.20 $0.20 $0.20 $0.20 $0.20
0 200 0 170 0 800
0 120 0 40 0
$0.00 $25.00 $0.00 $25.00 $0.00 $150.00
$0.00 $24.00 $0.00 $8.00 $0.00 $76.00
$0.00 $49.00 $0.00 $33.00 $0.00 $226.00