What is the total annual cycle-inventory cost (i.e., holding cost + ordering cost) of the two parts,
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What is the total annual cycle-inventory cost (i.e., holding cost + ordering cost) of the two parts, respectively, based on their current ordering quantity?
- What is the economic order quantity (EOQ) for the two parts? What would be the total cost (i.e., holding cost + ordering cost) of the two parts, respectively, if they were to switch to EOQ? How are they different from the current costs?
- What are the reorder points (R) for the two parts, respectively, if Sue were to adopt a continuous-review system (Q-system)?
- What are the time between orders (P) and the target inventory (T) for the two parts, if Sue were to adopt a period-review system (P-system)?
- Which ordering system (Q or P) would you recommend for each of the two parts? Why?
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