HW #8 19.3-2 19.3-14 Due Day: Nov 30

19.3-2 The demand for a product is 600 units per week, and the items are with drawn at a constant rate. The setup cost for placing an order to replenish inventory is $25. The unit cost of each item is $3, and the inventory holding cost is $0.05 per item per week. (a) Assuming shortages are not allowed, determine how often to order and what size the order should be. (b) If shortages are allowed but cost $2 per item per week, determine how often to order and what size the order should be.

19.3-14 In the basic EOQ model, suppose the stock is replenished uniformly (rather than instantaneously) at the rate of b items per unit time until the order quantity Q is fulfilled. Withdrawals from the inventory are made at the rate of a items per unit time, where a < b. Replenishments and withdrawals of the inventory are made simultaneously. For example, if Q is 60, b is 3 per day, and a is 2 per day, then 3 units of stock arrive each day for days 1 to 20, 31 to 50, and so on, whereas units are withdrawn at the rate of 2 per day every day. The diagram of inventory level versus time is given below for this example.

HW #8 Answer 19.3-2 19.3-14

19.3-2 (a) (b)

19.3-14 (a) (b)