Dynamic Lot sizing
Suppose that the demand for January – April is as follows:
Month Demand
January 10
February 20
March 40
April 50
If the order setup cost is $25 and the inventory cost per unit per month is $1. Under the optimal inventory plan,
1) What is the order size of each month?
2) What is the inventory of each month?
3) What is the total cost?
Hint: To calculate optimal inventory plan, you should use the Wagner Whittin Procedure.