What is the cost incurred per unit time

Reference no: EM131800701

Consider the following two-echelon inventory system. There are two depots at the lower echelon and one distribution center at the upper echelon. Demand is deterministic with a constant rate. Backordering is not allowed. Consider the following parameter setting:

Location	Demand per week	Cycle time	Holding cost	Replenishment cost per order
Distribution center		4 weeks and 2 weeks alternating	0.5/unit	10
Depot 1	4	2 weeks	2/unit	16
Depot 2	1	3 weeks	1/unit	4.5

What is the cost incurred per unit time for this inventory system? Be careful with the "system inventory" level for depot 1 and depot 2. It may not have the zero inventory property.

Reference no: EM131800701

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