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
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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 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.
Item
Annual demand
Holding cost (% of item cost)
Setup or order cost
Lead time
Safety stock
Item cost
PORTAL
Tegdiw
10,000
20%
$150.00
4 weeks
55 units
$10.00
201
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 cost PORTAL Tegdiw 10,000 20% $150.00 4 weeks 55 units $10.00 201 Widget 5,000 20% $25.00 1 week 5 units $2.00
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