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A. Find the total inventory costs if using inventory policy.

A. Find the total inventory costs if using inventory policy.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Jill's Job Shop buys two parts (Tegdiws and Widgets) for use in its production system from two different suppliers. The parts are needed throughout the entire 52-week year. Tegdiws are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. Widgets are ordered from a supplier who stops by every three weeks. Data for both products are as follows:

A. Find the total inventory costs if using inventory policy.

This is a case considering safety stock (make sure to use the right formula)

Item Annual demand Holding cost (% of item cost) Setup or order cost Lead time Safety stock Item costA Tegdiw 10,000 20% $150.00 4 weeks 55 units $10.00 Widget 5,000 20% $25.00 1 week 5 units $2.00
Transcribed Image Text:Item Annual demand Holding cost (% of item cost) Setup or order cost Lead time Safety stock Item costA Tegdiw 10,000 20% $150.00 4 weeks 55 units $10.00 Widget 5,000 20% $25.00 1 week 5 units $2.00
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