2. 1 By: Prof. Y. Peter Chiu Materials Management Inventory Management ~ HOMEWORK SOLUTION ~ Xtra 4.29, 4.30, 4.45

3. 2 4.29 i=18% Part # 1 2 3 2,500 5,500 1,450 $80 120 60 $16 18 22 45,000 40,000 26,000 2.88 3.24 3.96 2.72 2.7945 3.7392 0.1373 343.2 755.1 199.1 0.007626 0.018877 0.007657 (Rotation Cycle Policy) (years) (a) (a)

4. 3 (b) & (c) (C) Ans. Production Time (b) Ans. (busy time) (idle time) 4.29

5. 4 (d) 4.29

6. 5 4.30 1 years= 20*12=240 (days) J-55R H-223 K-18R Z-344 1500 1680 540 2880 33600 52800 24000 39600 $102 68 187 263.5 $20 35 12 45 $4 7 2.4 9 3.8214 6.7773 2.3460 8.3455 5732.1 11385.9287.3 256.50.1710 24035.0 1266.892.3 492.5 0.1710 0.00763 0.00544 0.00385 0.012442.98 0.92 1.31 1.83 

7. 64.30 (a) (d) (c) (b) 1 234 104327651098 1.83 3.14 4.06 7.04 40302050 41.04 42.87 44.18 45.1 

8. 7 4.45 a), b), and c) a), b), and c). Type ABCDEFGHABCDEFGH 25900 42000 14400 46000 12500 75000 30000 18900 1125000 1375000 825000 800000 450000 975000 725000 300000 0.003 0.002 0.008 0.002 0.01 0.005 0.004 0.007 0.00063 0.00042 0.00168 0.00042 0.0021 0.00105 0.00084 0.00147 0.000615 0.000407 0.001650 0.000395 0.002041 0.000969 0.000805 0.001377 120 80 160 80 60 120 20 60 15.93 17.10 23.76 18.17 25.51 72.68 24.15 26.03 64,846 105,155 36,053 115,170 31,296 187,778 75,111 47,320

9. 8 Setup costHolding cost $47.93 31.95 63.91 31.95 47.93 7.99 23.96 29.74 21.41 $19.94 30.23 90.98 31.93 22.75 32.59 93.65 53.36 $67.87 54.70 38.22 138.91 55.89 56.55 $559.15 (c) (c) ∴4.45 (a) (a) (b) (b) ∴ ∴

10. 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

11. 10 The End The End