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# Lot-for-lot, economic order quantity, and least total cost

An item has a setup cost of \$100 and a weekly holding cost of \$0.50 per unit. Given the following net requirements, what should the lot sizes be using lot-for-lot (L4L), economic order quantity (EOQ) and least total cost (LTC)? Also, what is the total cost associated with each lot-sizing technique?

Period (in weeks) 1 2 3 4 5 6 7 8 Total
Gross Requirement 10 30 10 50 20 40 50 30

#### Solution Preview

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SET Up cost \$100
Holding Cost \$0.50

Period 1 2 3 4 5 6 7 8
Gross Requirement 10 30 10 50 20 40 50 30

1) L4L
Assuming lead time is 0 weeks (we get the item as soon as it is ordered)
Assuming no safety stock (demand is stable and known)
Total
Period 1 2 3 4 5 6 7 8
Order 10 30 10 50 20 40 50 30 240
Holding Cost \$- \$- ...

#### Solution Summary

This solution provides a complete computation of the given accounting problem in Excel.

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