1. What factors should be considered when developing inventory systems for the 10,000 items carried by Dano's? What are the key differences between items that would affect how their inventory is managed? For example, how should prescription drugs be handled differently from over-the-counter items? Or how do seasonal products differ from more stable products?
2. Develop an inventory system for Tylenol caplets and for Milky Way candy bars. Hint: You will need to choose an appropriate cycle-service level and an appropriate holding cost for each item.
3. Discuss the characteristics of Raid rat spray that might suggest that it should have a different type of inventory system. What factors should be considered in developing a system for Raid?
4. Compare the annual costs for your plan for Tylenol and Milky Way relative to the costs under the current plan. You may want to consider ordering, holding, and stockout costs.