FACTURING liances for erienced a ded in the n a review effort to e testing in-house...

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FACTURING liances for erienced a ded in the n a review effort to e testing in-house dered at n began owever, ear ago, None- policy. some- k with eel." Further discussions with Tom revealed a cost of $32 to order and receive a shipment of display units from the supplier. The company assembles 89 kits a week. Also, information from Sara James, in Accounting, indicated a weekly carrying cost of $.08 for each display unit. The supplier has been quite reliable with deliveries; orders are received five working days after they are faxed to the supplier. Tom indicated that as far as he was concerned, lead-time variabil- ity is virtually nonexistent. Questions 1. Would using an order interval other than every six weeks reduce costs? If so, what order interval would be best, and what order size would that involve? 2. Would you recommend changing to the optimal order interval? Explain. FACTURING liances for erienced a ded in the n a review effort to e testing in-house dered at n began owever, ear ago, None- policy. some- k with eel." Further discussions with Tom revealed a cost of $32 to order and receive a shipment of display units from the supplier. The company assembles 89 kits a week. Also, information from Sara James, in Accounting, indicated a weekly carrying cost of $.08 for each display unit. The supplier has been quite reliable with deliveries; orders are received five working days after they are faxed to the supplier. Tom indicated that as far as he was concerned, lead-time variabil- ity is virtually nonexistent. Questions 1. Would using an order interval other than every six weeks reduce costs? If so, what order interval would be best, and what order size would that involve? 2. Would you recommend changing to the optimal order interval? Explain.