Essay
It is time for a company to do its MRP schedule, but they aren't sure which lot sizing approach to use: lot-for-lot (LFL), fixed order quantity (FOQ) using the EOQ approach, or period order quantity (POQ).They have the following information regarding the product they wish to produce:
Carrying costs = $1 per unit per week
Set-up costs = $125
Annual demand = 2000 units
Work year = 50 weeks
a.What is the production lot size for week 2 using the LFL method?
b.What is the total cost using the LFL approach?
c.What is the fixed order quantity (EOQ) using the EOQ approach?
d.What is the beginning inventory in week 3 using the FOQ approach?
e.What is the total cost using the FOQ method?
f.What is the period order quantity (POQ)?
g.What is the ending inventory in week 4 using the POQ approach?
h.What is the total cost using the POQ method?
Correct Answer:
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a.Lot-for-lot (LFL):
b.Set-up costs = ...View Answer
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Correct Answer:
Verified
b.Set-up costs = ...View Answer
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