# Question: The Toyota dealer from problem 3 is considering installing either

The Toyota dealer from problem 3 is considering installing either a Q or a P system for inventory control. The standard deviation of demand has been 4 units per month, and the replenishment lead time is two months. A 95 percent service level is desired.

a. If a continuous review system is used, what is the value of Q and R that should be used?

b. If a periodic review system is used, what is the value of P and T that would be applicable?

c. What are the pros and cons of using the P system compared with using the Q system for this part?

a. If a continuous review system is used, what is the value of Q and R that should be used?

b. If a periodic review system is used, what is the value of P and T that would be applicable?

c. What are the pros and cons of using the P system compared with using the Q system for this part?

## Relevant Questions

The Suregrip Tire Company carries a certain type of tire with the following characteristics: Average annual sales = 600 tires Ordering cost = $40 per order Carrying cost = 25 percent per year Item cost = $50 per tire ...The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a demand of four units per month and costs $25 each. The carrying ...Suppose that for problem 1 in the chapter, the Always Fresh Grocery Store is offered a discount by its supplier if more than 50 cases of tea are ordered at one time. The unit item costs are $80 per case for 0 to 49 cases and ...Describe how MRP concepts could be used for the following service operations: a. Hotel b. Legal office The following information is given for a particular part. Using a lead time of two weeks, complete the table.Post your question