A component used in a manufacturing facility is ordered from an outside supplier. The time-phased requirements for the component over the next 7 weeks are 15, 20, 16, 10, 20, 14, and 18. Current inventory of this item is 8, and the ending inventory should be 7. Assume a holding cost of $2 per week and a setup cost of $40.

1) Determine the order policy for this item over the next 7 weeks based on Silver-Meal heuristic.

2) Assume there is capacity constraint to the lot sizing

a. Suppose that the maximum order size is 10 per week. Does there exist a feasible solution?

b. Suppose that the maximum order size is 20 per week. Use lot-shifting technique to obtain a feasible solution (without using holding and setup cost).

c. Suppose that the maximum order size is 20 per week. Improve the solution obtained in Part (b)