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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...

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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: ITEM TEGDIW WIDGET Annual demand $10,000 $5,000 Holding cost (% of item cost) 20% 20% Setup or order cost $150.00 $25.00 Lead time 4 weeks 1 week Safety stock 55 units 5 units Item cost $10.00 $2.00 a. What is the inventory control system for Tegdiws? That is, what is the reorder quantity and what is the reorder point?
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Item X is a standard item stocked in a company’s inventory of component parts. Each year the firm, on a random basis, uses about 2,000 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $5 per unit of average inventory. Every time an order is placed for more item X, it costs $10. a. Whenever item X is ordered, what should the order size be? b. What is the annual cost for ordering item X? c. What is the annual cost for storing item X?
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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...

Sign up to view the full answer

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