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.
(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
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Net requirements
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Planned order receipts =
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Planned order releases
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Set Up cost
ANSWER
Holding Cost
ANSWER
Total CosT
ANSWER
(B) EOQ technique
EOQ
ANSWER
WEEK
1
2
3
4
5
6
7
8
Gross requirements
0
200
250
0
300
100
200
Projected on hand
300
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Net requirements
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Planned order receipts
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Planned order releases
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Set Up cost
ANSWER
Holding Cost
ANSWER
Total
ANSWER
(C) POQ technique
POQ Interval =
ANSWER
Month
1
2
3
4
5
6
7
8
Gross requirements
0
200
250
0
300
100
200
Projected on hand
300
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Net Requirement
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Planned Receipt
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Planned Order
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
ANSWER
Set Up cost
ANSWER
Holding Cost
ANSWER
Total
ANSWER