Professional Documents
Culture Documents
Homework 4 Solution
Chapter 7
14.
Demand = (6, 12, 4, 8,15, 25, 20, 5, 10, 20, 5, 12)
Starting inventory = 4
Ending inventory = 8
h=1
K = 40
Net out starting and ending inventories to obtain
r = (2, 12, 4, 8,15, 25, 20, 5, 10, 20, 5, 20)
a) Silver Meal
Start in period 1:
C(1) = 40
C(2) = (40 + 12)/2 = 26
C(3) = [40 + 12 + (2)(4)]/3 = 20
C(4) = [40 + 12 + (2)(4) + (3)(8)]/4 = 21
Stop.
Start in period 4:
C(1) = 40
C(2) = (40 + 15)/2 = 27.5
C(3) = [40 + 15 + (2)(25)]/3 = 35
Stop.
Start in period 6:
C(1) = 40
C(2) = (40 + 20)/2 = 30
C(3) = [40 + 20 + (2)(5)]/3 = 23.3333
C(4) = [40 + 20 + (2)(5) + (3)(10)]/4 = 25
Stop.
Start in period 9:
C(1) = 40
C(2) = (40 + 20)/2 = 30
C(3) = [40 + 20 + (2)(5)]/3 = 23.3333
C(4) = [40 + 20 + (2)(5) + (3)(20)]/4 = 32.5
Stop.
Silver Meal solution: r = (2, 12, 4, | 8,15, | 25, 20, 5, | 10, 20, 5, | 20)
b) LUC
Start in period 1:
C(1) = 40/2 = 20
C(2) = (40 + 12)/(2 + 12) = 3.71
C(3) = (40 + 12 + 8) /(2 + 12 + 4) = 3.33
Homework 4 Solution
Stop.
Start in period 5:
C(1) = 40/15 = 2.67
C(2) = (40 + 25)/(15 + 25) = 1.625
C(3) = (40 + 25 + 40)/(15 + 25 + 20) = 1.75
Stop.
Start in period 7:
C(1) = 40/20 = 2
C(2) = (40 + 5)/(20 + 5) = 1.8
C(3) = (40 + 5 + 20)/(20 + 5 + 10) = 1.86
Stop.
Start in period 9:
C(1) = 40/10 = 4
C(2) = (40 + 20)/(10 + 20) = 2
C(3) = (40 + 20 + 10)/(10 + 20 + 5) = 2
C(4) = (40 + 20 + 10 + 60)/(10 + 20 + 5 + 20) = 2.3636
LUC solution: r = (2, 12, 4, 8, | 15, 25, | 20, 5, | 10, 20, 5, | 20)
c) Part Period Balancing
This method sets the order horizon equal to the number of periods that most closely matches
the total holding cost with the setup cost, which is $40 in this problem. Therefore, we
compute the absolute value of the difference between the holding and setup costs in each
period and find the one with the lowest value.
Start in period 1:
# of Periods
2
3
4
Holding Cost
12
20
44
Start in period 5:
# of Periods
2
3
Holding Cost
25
65
Start in period 7:
# of Periods
2
3
4
Holding Cost
5
25
85
Holding Cost
Homework 4 Solution
5
45
35
5
closest
Part Period Balancing solution: r = (2, 12, 4, 8, | 15, 25, | 20, 5, 10, | 20, 5, 20)
d) Cost comparison of three methods.
1. SM incurs a setup cost of $200 from the 5 setups and a holding cost of 20+15+30+30 =
$95. The total cost is $295.
2. LUC incurs a setup cost of $200 from the 5 setups and a holding cost of 44+25+5+30 =
$104. The total cost is $304.
3. PPB incurs a setup cost of $160 from the 4 setups and a holding cost of 44+25+25+45 =
$139. The total cost is $299.
In this case, Silver Meal is the least expensive method.
17.
a) Average demand = (335 + 200 + 140 + 440 + 300 + 200) / 6 = 269.17
EOQ =
(2)(200)(269.17)
= 599
0.3
Week
Demand
Production
Inventory
1
335
599
264
2
200
0
64
3
140
599
523
4
440
0
83
5
300
599
382
6
200
0
182
b) Silver Meal
Start in period 1:
C(1) = 200
C(2) = [200 + (200)(0.3)]/2 = 130
C(3) = [(2)(130) + (2)(140)(0.3)]/3 = 114.67
C(4) = [(3)(114.67) + (3)(440)(0.3)]/4 = 185
Stop.
Start in period 4:
C(1) = 200
C(2) = [200 + (300)(0.3)]/2 = 145
C(3) = [(2)(145) + (2)(200)(0.3)]/3 = 136.67
Stop.
Hence y1= 335 + 200 + 140 = 675, y4= 440 + 300 + 200 = 940
c) LUC
Start in period 1:
C(1) = 200/335 = 0.597
Homework 4 Solution
Stop.
Start in period 3:
C(1) = 200/140 = 1.428
C(2) = [200 + (400)(0.3)]/(140 + 440) = 0.572
C(3) = [200 + (400)(0.3) + (300)(2)(0.3)]/(140 + 440 + 300) = 0.582
Stop.
Start in period 5:
C(1) = 200/300 = 0.67
C(2) = [200 + (200)(0.3)]/(300 + 200) = 0.52
Stop.
Hence y1= 335 + 200 = 535, y3= 140 + 440 = 580, y5 = 300 + 200 = 500
d) Part Period Balancing
Start in period 1:
# of Periods
2
3
4
Holding Cost
60
144
540
Start in period 4:
# of Periods
2
3
Holding Cost
90
210
Homework 4 Solution
c13
= min
f 1 c 23
f2 = min
c14
f3 = min f1 c 24 = min
f c
2 34
33
= 33 at i = 1
30 30
33
30 30
33 30
= 33 at i = 1
c15
f c
1 25
f4 = min
= min
f 2 c35
f 3 c 45
f 3 c 46
= min
f 4 c56
f5 = min
Homework 4 Solution
111
30 82
= 63 at i = 4
33 56
33 30
33 53
63 30
= 86 at i = 4
c 46 f 6
f4 = min
c34 f 4
30 53
56 30
c 23 f 3
c f
24
4
f2 = min
= min
c 25 f 5
c 26 f 6
30 83
30 53
= 83 at j = 4
82 30
151 0
c12
c
13
f1 = min c14
c
15
c16
30 83
33 83
33 53
111 30
203 0
f2
f 3
f 4 = min
f5
f 6
102 0
= 83 at j = 4
= 86 at j = 4
The solution is the same as the one obtained by the forward dynamic programming method.
22. The given information is
r = (335, 200, 140, 440, 300, 200)
Homework 4 Solution
K = $200
h = 0.30
The resulting cij matrix for this problem is:
1
2
3
4
5
6
2
200
3
260
200
4
344
242
200
5
740
506
332
200
6
1100
776
512
290
200
7
1400
1016
692
410
260
200
As in problem 17, both forward and backward versions of the WW algorithm can be used.
We illustrate the backward version here:
f6 = c67 = 200
(c5 j f j ) = min (400, 260) = 260 at j = 7.
f5 = min
j 5
200 260
(c 3 j
f3 = min
j 3
410
200
410
332 260
f j ) = min
= 592 at j = 5.
512
200
692
(c 2 j
f2 = min
j 2
200 592
242 410
1016
(c1 j
f1 = min
j 1
200 652
260 592
344 410
f j ) = min
= 754 at j = 4.
740 260
1100 200
1400
The minimum cost is thus 754. In order to determine the optimal policy, we start with f1 and
retrace the optimal solutions at the correct stages. Since in period 1 the optimal i = 4, it
follows that y1 = r1 + r2 + r3 = 675, y2 = 0, y3 = 0. The next period of ordering is period 4. Since
the optimal value of j corresponding to f4 is j = 7, it follows that y4 = r4 + r5 + r6 = 940 and y5 =
y6 = 0. Note that this is the same solution obtained by the Silver-Meal heuristic.
8
Homework 4 Solution
27. Because of the maximum order size constraint, we first check the feasibility condition:
j
j
1 j
ci ri for j = 1, , n. Equivalently, we may check if ri is less than c=20 for all
j i 1
i 1
i 1
j.
Feasibility check:
r1
(r1+r2)/2
(r1+r2+r3)/3
(r1+r2+r3+r4)/4
(r1+r2+r3+r4+r5)/5
(r1+r2+r3+r4+r5+r6)/6
(r1+r2+r3+r4+r5+r6+r7)/7
(r1+r2+r3+r4+r5+r6+r7+r8)/8
(r1+r2+r3+r4+r5+r6+r7+r8+r9)/9
(r1+r2+r3+r4+r5+r6+r7+r8+r9+r10)/10
(r1+r2+r3+r4+r5+r6+r7+r8+r9+r10+r11)/11
(r1+r2+r3+r4+r5+r6+r7+r8+r9+r10+r11+r12)/12
=(2+12)/2
=(2+12+4)/3
=(2+12+4+8)/4
=(2+12+4+8+25)/5
=(2+12+4+8+25+15)/6
=(2+12+4+8+25+15+20)/7
=(2+12+4+8+25+15+20+5)/8
=(2+12+4+8+25+15+20+5+10)/9
=(2+12+4+8+25+15+20+5+10+20)/10
=(2+12+4+8+25+15+20+5+10+20+5)/11
=(2+12+4+8+25+15+20+5+10+20+5+20)/12
=2
=7
=6
=6.5
=10.2
=11
=12.2
=11.3
=11.2
=12.1
=11.4
=12.1
All the ratios are less than 20, so there exists a feasible solution.
Initial Solution:
Next, we obtain a feasible solution by back-shifting demands in the periods that is higher
than 20. Period 5 has a demand of 25 units, which is 5 units higher than the maximum order
size. The 5 units of excess is back-shifted to period 4, yielding a modified requirement
schedule: r = (2, 12, 4, 8, 20, 20, 20, 5, 10, 20, 5, 20). This is a feasible schedule and the
relevant data is shown in the following table:
Month
r'
c
y
Excess cap.
1
2
20
2
18
2
12
20
12
8
3
4
20
4
16
4
8
20
8
12
5
20
20
20
0
6
20
20
20
0
7
20
20
20
0
8
5
20
5
15
9
10
20
10
10
10
20
20
20
0
11
5
20
5
15
12
20
20
20
0
Improvement Steps:
Starting from the last period, consider shifting the demand to earlier periods:
From Period
12
12
To Period
11
9
The saving in setup cost of $40 is greater than the additional holding costs.
Month
r'
C
1
2
20
2
12
20
3
4
20
4
8
20
5
20
20
6
20
20
7
20
20
8
5
20
9
10
20
15
10
20
20
11
5
20
20
12
20
20
0
Homework 4 Solution
12
20
20
20
18
16
12
15
10
5
10
20
0
5
0
15
20
0
Shifting demands in period 11 to earlier periods does not result in a saving, but period 10
does.
From Period
10
10
To Period
9
8
Again, the saving in setup cost of $40 is greater than the additional holding costs.
Month
r'
c
Excess cap.
1
2
20
2
12
20
3
4
20
4
8
20
5
20
20
6
20
20
7
20
20
8
5
20
12
20
20
20
20
5
18
16
12
0
15
9
10
20
20
15
10
0
5
10
10
20
20
11
5
20
12
20
20
0
20
20
5
0
20
0
15
Excess cap.
To Period
3
1
2
20
2
12
20
3
4
20
4
8
20
5
20
20
6
20
20
7
20
20
8
5
20
12
12
4
0
8
20
20
20
20
5
8
16
20
12
0
15
18
9
10
20
20
15
10
0
5
10
10
20
20
11
5
20
12
20
20
0
20
20
5
0
20
20
0
0
15
20
0
10
20
20
11
5
20
12
20
20
20
To Period
2
1
1
2
20
2
12
20
20
3
4
20
0
12
4
8
20
0
5
20
20
6
20
20
7
20
20
8
5
20
20
9
10
20
20
15
10
Excess cap.
12
14
18
0
8
Homework 4 Solution
4
20
8
16
20
20
20
20
12
0
15
10
0
5
10
20
20
20
0
0
15
20
0
The capacitated solution is y =(6, 20, 0, 0, 20, 20, 20, 20, 20, 0, 20, 0)
50.
b) Using POQ, one will never order in periods in which there is positive inventory, which we
know from the results of section 3 is optimal. Hence, this method is likely to be better than
simple EOQ.
c) This method orders a fixed number of periods of supply and ignores the magnitudes of the
requirements. The three heuristic methods we discussed (S/M, PPB, and LUC) do take the
sizes of demands into account and for that reason are more likely to yield lower cost
solutions. However, the computations are simpler with this method.
d) From problem 17, we have
EOQ = 599
ri = 1615 which gives = 1615/6 = 269.17
P = EOQ/= 599/269.17 = 2.23
which we round to 2. Hence, the POQ solution is
y = (535, 0, 580, 0, 500, 0).
The cost of this solution is (3)(200)+(0.30)(200+440+200) = 852.
11