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A man supplies various groceries to vendors. He doesn't grow his own groceries in-house. He buys cheaper products from 3rd party vendors instead. He estimates that the demand for groceries for the next 5 months will be D = (230, 150, 170, 260, 190). He pays an expensive overhead on each order that he makes, with the total cost of placing a bulk order being $128. It should be noted that holding costs are small, as it only costs $0.50 to keep one product in inventory for one month. Additionally, each product the man purchases costs $2.
(a) Determine the optimal ordering schedule and the total cost.
(b) What is the ordering schedule and the total cost (using POQ lot-sizin?).
(c) What is the ordering schedule and the total cost (using Silver-Meal lot-sizing heuristic)?
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