Part Period Balance (PPB)

Dynamic Lot SizingDetailed Calculations

Period12345678910

Demand10151216151218142216

Order cost = $150.

Carrying cost = $2 per item per period (based on average).

Part Period Balance (PPB)AlternativeOrder CostCarrying CostRemarks

Order 10 to cover the needs of period 115010Continue until carrying costs pass order cost

Order 25 to cover the needs of periods 1 and 215055Continue until carrying costs pass order cost

Order 37 to cover the needs of periods 1, 2 and 3150115Continue until carrying costs pass order cost

Order 53 to cover the needs of periods 1, 2, 3 and 4150227Stop as carrying costs are larger than order cost

Decision: since 115 is closer to 150 than 227 is, order 37 to cover the needs of periods 1, 2 and 3

Order 16 to cover the needs of period 415016Continue until carrying costs pass order cost

Order 31 to cover the needs of periods 4 and 515061Continue until carrying costs pass order cost

Order 43 to cover the needs of periods 4, 5 and 6150121Continue until carrying costs pass order cost

Order 61 to cover the needs of periods 4, 5, 6, and 7150247Stop as carrying costs are larger than order cost

Decision: since 121 is closer to 150 than 247 is, order 43 to cover the needs of periods 4, 5 and 6

Order 18 to cover the needs of period 715018Continue until carrying costs pass order cost

Order 32 to cover the needs of periods 7 and 815060Continue until carrying costs pass order cost

Order 54 to cover the needs of periods 7, 8, and 9150170Stop as carrying costs are larger than order cost

Decision: since 170 is closer to 150 than 60 is, order 54 to cover the needs of periods 7, 8, and 9.Since only period 10 remains in the planning horizon, order the needs of that period.

Total cost = 150 + 115 + 150 +121 + 150 + 170 + 150 + 16 = $1,022.

Silver-Meal (SM)

AlternativeOrder CostCarrying CostTotal Cost per periodRemarks

Order 10 to cover the needs of period 115010160.00Continue

Order 25 to cover the needs of periods 1 and 215055102.50Continue

Order 37 to cover the needs of periods 1, 2 and 315011588.33Continue

Order 53 to cover the needs of periods 1, 2, 3 and 415022794.25Stop

Decision: since 88.33 is the minimum, order 37 to cover the needs of periods 1, 2, and 3

Order 16 to cover the needs of period 415016166Continue

Order 31 to cover the needs of periods 4 and 515061105.5Continue

Order 43 to cover the needs of periods 4, 5 and 615012190.33Continue

Order 61 to cover the needs of periods 4, 5, 6, and 715024799.25Stop

Decision: since 90.33 is the minimum, order 43 to cover the needs of periods 4, 5, and 6

Order 18 to cover the needs of period 715018168Continue

Order 32 to cover the needs of periods 7 and 815060105Continue

Order 54 to cover the needs of periods 7, 8, and 9150170106.67Stop

Decision: since 105 is the minimum, order 32 to cover the needs of periods 7 and 8

Order 22 to cover the needs of period 915022172Continue

Order 38 to cover the needs of periods 9 and 1015070110Stop

Decision: since 110 is the minimum and no more periods to go, order 38 to cover the needs of periods 9 and 10

Total cost = 150 + 115 + 150 +121 + 150 + 60 + 150 + 70 = $966.

Company Related data:

No of Months of Production : Dec 2014 to April 2015 (5 months = consider as 10 periods )

Total units produced = around 300

Production expense = around 600

Market Price = 1200

Holding Cost=Ch=(Interest Rate 8% + Storage cost 3%)*30

=3.3%

Ordering Cost for one Purchase of coconut = Rs. 40(calls,printouts....)Silver-Meal (SM)

AlternativeOrder CostCarrying CostTotal Cost per periodRemarks

Order 10 to cover the needs of period 1403.343.3Continue

Order 25 to cover the needs of periods 1 and 215055102.50Continue

Order 37 to cover the needs of periods 1, 2 and 315011588.33Continue

Order 53 to cover the needs of periods 1, 2, 3 and 415022794.25Stop

Decision: since 88.33 is the minimum, order 37 to cover the needs of periods 1, 2, and 3

Order 16 to cover the needs of period 415016166Continue

Order 31 to cover the needs of periods 4 and 515061105.5Continue

Order 43 to cover the needs of periods 4, 5 and 615012190.33Continue

Order 61 to cover the needs of periods 4, 5, 6, and 715024799.25Stop

Decision: since 90.33 is the minimum, order 43 to cover the needs of periods 4, 5, and 6

Order 18 to cover the needs of period 715018168Continue

Order 32 to cover the needs of periods 7 and 815060105Continue

Order 54 to cover the needs of periods 7, 8, and 9150170106.67Stop

Decision: since 105 is the minimum, order 32 to cover the needs of periods 7 and 8

Order 22 to cover the needs of period 915022172Continue

Order 38 to cover the needs of periods 9 and 1015070110Stop

Decision: since 110 is the minimum and no more periods to go, order 38 to cover the needs of periods 9 and 10

Total cost = 150 + 115 + 150 +121 + 150 + 60 + 150 + 70 = $966.