1. HW #8
19.3-2
Due Day: Nov 30

2. 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.

3.
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day, and a is 2 per day, then 3 units of stock arrive each day for days 1 to 20, 31 to 50, and so on, whereas units are withdrawn at the rate of 2 per day every day.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.

4. HW #8
Answer
19.3-2

5. 19.3-2
(a)
(b)

6.
(a)
(b)