1 By: Prof. Y. Peter Chiu Materials Management Inventory Management ~ HOMEWORK SOLUTION ~ Xtra 4.29, 4.30, 4.45

i=18% Part # ,500 5,500 1,450 $ $ ,000 40,000 26, (Rotation Cycle Policy) (years) (a) (a)

3 (b) & (c) (C) Ans. Production Time (b) Ans. (busy time) (idle time) 4.29

4 (d) 4.29

years= 20*12=240 (days) J-55R H-223 K-18R Z $ $ $ 

64.30 (a) (d) (c) (b) 

a), b), and c) a), b), and c). Type ABCDEFGHABCDEFGH , ,155 36, ,170 31, ,778 75,111 47,320

8 Setup costHolding cost $ $ $ $ (c) (c) ∴4.45 (a) (a) (b) (b) ∴ ∴

9 (d) A rotation cycle time of 2.5 years will clearly be too long to satisfy their obligation of making three shipments per year for each type of button. They would need to reduce the rotation cycle time to 4 months and adjust the lot sizes down accordingly The actual lot sizes would depend on the contractual obligations the firm has with their customers.4.45

10 The End The End