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. What is the inventory control system for Tegdiws? That is, what is the reorder quantity and what is the reorder point? b. Find the total inventory costs if using inventory policy
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. What is the inventory control system for Tegdiws? That is, what is the reorder quantity and what is the reorder point? b. Find the total inventory costs if using inventory policy
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. What is the inventory
b. Find the total inventory costs if using inventory policy.
This is a case considering safety stock (make sure to use the right formulas)
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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