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Files and More, Inc. (F&M), a manufacturer of office equipment, uses MRP to schedule its production. Because of the current recession and the need to cut costs, F&M has targeted inventory as a prime area for cost reduction. However, the company does not want to reduce its customer service level in the process. Demand and inventory data for a two-drawer file cabinet are given in the following table. Complete an MRP matrix for the file cabinet using: (a) L4L, (b) EOQ, and (c) POQ lot sizing. Which lot-sizing rule do you recommend?
Period
1
2
3
4
5
Demand
20
40
30
10
45
Ordering cost = $100 per order
Holding cost = $1 per cabinet per period
Lead time = 1 period
Beginning inventory = 25
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