ICON Motors has the following demand to meet for custom manufactured parts. The holding cost for that item is $1 per week and each setup costs $500. Lead time is 2 weeks. Calculate the planned order releases using: (a) Lot for Lot (b) EOQ, and (c) the POQ techniques.
ICON Motors has the following demand to meet for custom manufactured parts.
The holding cost for that item is $1 per week and each setup costs $500.
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ICON Motors has the following demand to meet for custom manufactured parts. The holding cost for that item is $1 per week and each setup costs $500. Lead time is 2 weeks. Calculate the planned order releases using: (a) Lot for Lot (b) EOQ, and (c) the POQ techniques.
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Lead time is 2 weeks.
Calculate the planned order releases using: (a) Lot for Lot (b) EOQ, and (c) the POQ techniques.
(A) Lot for Lot technique
| WEEK | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Gross requirements | 0 | 200 | 250 | 0 | 300 | 100 | 200 | 0 | |
| Projected on hand | 300 | ||||||||
| Net requirements | |||||||||
| Planned order receipts = | |||||||||
| Planned order releases | |||||||||
| Set Up cost | |
| Holding Cost | |
| Total CosT |
(B) EOQ technique
| EOQ |
| WEEK | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Gross requirements | 0 | 200 | 250 | 0 | 300 | 100 | 200 | ||
| Projected on hand | 300 | ||||||||
| Net requirements | |||||||||
| Planned order receipts | |||||||||
| Planned order releases | |||||||||
| Set Up cost | |
| Holding Cost | |
| Total |
(C) POQ technique
| POQ Interval = |
| Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Gross requirements | 0 | 200 | 250 | 0 | 300 | 100 | 200 | ||
| Projected on hand | 300 | ||||||||
| Net Requirement | |||||||||
| Planned Receipt | |||||||||
| Planned Order |
| Set Up cost | |
| Holding Cost | |
| Total |
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