Question

In: Operations Management

What is the total cost (e.g. the sum of set-up costs and holding costs) of producing...

What is the total cost (e.g. the sum of set-up costs and holding costs) of producing the gold seals using a Silver-Meal algorithm? Period - Forecast below :

Period 1 - 130

Period 2 - 30

Period 3 - 60

Period 4 - 50

Period 5 - 200

Period 6 - 550

Period 7 - 180

Period 8 - 140

Period 9 - 60

Period 10 - 50

Period 11 - 100

Period 12 - 250

Set Up cost 1660.5

Holding Cost/seal 2.46/period

Please solve using Silver-meal heuristic.

Expert Solution

Solution:

Formula for silver meal algorithm is given as follows:

K = 1660.5

‘hr₁ = holding cost for period 1= 2.46 x 130 = 319.8

‘hr₂ = holding cost for period 1= 2.46 x 30 = 73.8

‘hr₃ = holding cost for period 1= 2.46 x 60 = 147.6

‘hr₄ = holding cost for period 1= 2.46 x 50 = 123

‘hr₅ = holding cost for period 1= 2.46 x 200 = 492

‘hr₆ = holding cost for period 1= 2.46 x 550 = 1353

‘hr₇ = holding cost for period 1= 2.46 x 180 = 442.8

‘hr₈ = holding cost for period 1= 2.46 x 140 = 344.4

‘hr₉ = holding cost for period 1= 2.46 x 60 = 147.6

‘hr₁₀ = holding cost for period 1= 2.46 x 50 = 123

‘hr₁₁= holding cost for period 1= 2.46 x 100 = 246

‘hr₁₂ = holding cost for period 1= 2.46 x 250 = 615

‘n=12

Substituting values in formula, we get

C = 27711.9/12

C = 2309.325

keosha answered 1 year ago

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