Refer to Exercise 21-5. Assume the economic lot size for small casings is 30,000 and that of the large casings is 10,000. Wadley Manufacturing sells an average of 590 small casings per workday and an average of 200 large casings per workday. It takes Wadley three days to set up the equipment for small or large casings. Once set up, it takes 20 workdays to produce a batch of small casings and 22 days for large casings. There are 250 workdays available per year.
Required:
1. What is the reorder point for small casings? Large casings?
2. Using the economic order batch size, is it possible for Wadley to produce the amount that can be sold of each casing? Does scheduling have a role here? Explain. Is this a push- or pull-through system approach to inventory management? Explain.