Operation Control
IE4372 Homework 4 due on April 5, Wednesday.
1. UI Gear Company consumes 520 gear sets per year. The carrying cost is $1 per unit per year and the set-up (ordering) costs is $20 per batch/order.
a) What is the optimal batch/order quantity (assuming infinite production rate) that UI gear should produce/buy gear sets in.
b) Assuming a 200 working day year, how frequently must UI-Gear set up to produce/buy.
c) Assuming a backlogging cost of $0.2 per unit per year, what is the Economic order quantity and backlogging level.
d) Your supervisor thinks that the economics of the situation do not justify the frequency you are recommending and allows you a 2% variability over the optimum total operating cost (total cost – item cost). What is the minimum setup/buying frequency (or maximum inventory cycle period) you can recommend? (Hint: you can use a larger lot size if the corresponding total cost is no more than 1.02*TC where TC is the minimal cost based on EOQ).
e) You have observed that production rate for the gear sets is 1040 sets/year and feel that the assumption of infinite production rate is not justified in the above calculations. Recalculate the optimal batch quantity, the setup frequency and the max cycle period for the gear set production under this observation.
2. An independent item in an inventory system is procured at the following discount schedule
LOT SIZE BETWEEN 0 500 2000 5000
AND 499 1999 4999 Over
PRICE/UNIT $4.00 3.50 3.00 2.50
The ordering cost is $100 and the demand is 1000 units/year. Annual inventory carrying cost is $1 per unit. Find the economic order quantity.
3. Develop a minimum cost aggregate plan for the following three period horizon:
Period
1 2 3
Demand (Units) 100 160 150
Fixed Set Up Cost $60 $70 $50
Holding Costs/Unit $0.80 $0.80 $1.00
Variable Prod. Costs/Unit.
Compare and contrast Mesopotamian culture with the Great Power cultures of International Bronze Age and decide what would be more important- cultural continuity or cultural transformation? Explain your reasoning with evidence
