EPL assembles and sales an electronics device (ED) on a contract basis. End item ED is composed of 2 units of component BG and 4 units of component DD. There are orders of 50, 90, 0, 850, 225, 425, 0, 600, 250, 100, 0, 500, and 300 units of the device (ED) in the next 13 weeks. BG is a routine component and procured easily. In procuring DD, an extra 20 percent scrap allowance must be added. A quantity of 400 units of DD will be received at the beginning of each of weeks 1 and 2. The ordering cost associated with DD is $300. The lead time is 2 weeks. The estimated inventory carrying cost is $1.5 per unit per week calculated on average inventory. Currently, 190 devices (ED) are available in the stock with 120 units of BG and 250 units of DD. The lead time for the item ED is one week, and for BG 1 day. – – The company wishes to know when and how much to order over the next 13 weeks by using the economic order quantity and the part period balancing procedures. Find the following factors for each of the procedures for component DD:
a. Weekly requirements of the item DD.
b. Week ending inventories.
c. Net requirements for the weeks.
d. Weekly Order release quantity.
e. Evaluate and find total carrying cost, total ordering cost, and total inventory cost.
