A periodic review method of inventory control is to be used for two products that are to be purchased from the same supplier at the same time. The following data have been collected for these items:

a. Design the control system for these products. State how the control system will work.
b. What is the average inventory level for each of these items?
c. What is the customer service level that can be expected for these items?
d. Suppose that the review time is set at four weeks. How will your answers to the previous questions change?

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PRODUCTS Weekly demand forecast, units Forecast error" (std. dev.), units Lead time, weeks Purchase price, dollar/unit in-stock probability during lead time plus order cycle Out-of-stock cost Carrying cost, percent/year Common purchase order cost, dollar/order Normally distributed 2,000 100 500 70 1.5 $2.25 90% 1.5 $1.90 80% Unknown 30% 30% $100