A Company Assembles Microcomputers for Sale to Computer Stores A Using the LFL Method, What Is the Size of Are

question 88

Essay

A company assembles microcomputers for sale to computer stores. They are trying to decide which lot sizing approach to use for developing their MRP schedules: lot-for-lot (LFL), fixed-order quantity (FOQ) using the EOQ approach, or periodic-order quantity (POQ). The setup cost is $1000 per order, the inventory-carrying cost is $2.50 per week per unit, and the annual demand for the computers is 10,000 units. The company is using a 50-week work year and disregarding the effects of initial inventory and safety stock. The estimated net requirements ?? the microcomputers for the next six weeks are:
$\begin{array}{|l|l|l|l|l|l|l|}\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \\\hline \text { Net Requirements } & 150 & 200 & 50 & 300 & 250 & 100 \\\hline\end{array}$
a. Using the LFL method, what is the size of the production lot for Week 2?
b. What is the total cost using the LFL method?
c. What is the economic order quantity (EOQ)?
d. What is the ending inventory in Week 3 using the EOQ approach?
e. What is the total cost using the EOQ method?
f. What is the periodic-order quantity (POQ)?
g. What is the beginning inventory in Week 4 using the POQ approach?
h. What is the total cost using the POQ method?

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Definitions:

U.S. Department Of Labor

A federal department responsible for promoting the welfare of job seekers, wage earners, and retirees in the United States, ensuring work-related benefits and rights.

Worker Resistance

Actions taken by employees to oppose changes, policies, or practices in the workplace perceived as harmful or unfair.

Employee Flexibility

The ability of employees to adapt to changes in their work environment or job responsibilities, often involving variable schedules or skillsets.

Time And Motion Studies

Systematic examinations and analyses of work processes to improve efficiency by reducing waste and unnecessary actions.