Question: A customer orders a bicycle. The Order gets transmitted electronically to the manufacturing plant. Then the manufacturing plant places an order electronically. The bike supplier,

A customer orders a bicycle. The Order gets transmitted electronically to the manufacturing plant. Then the manufacturing plant places an order electronically. The bike supplier, Bondo Bikes receives the order through MRP. Then, the bike supplier sends the order through email which is only looked at once every other day to their plastic supplier, Mayco Plastics who orders the pellets from DuPont via email and is looked at once a week.
Plastic pellets are delivered via barrels on a truck to Mayco Plastics warehouse and sits there for 10 days in safety stock until Mayco starts making the plastic spokes. Mayco takes 24 hours to make the spokes and then packages them up where they are stored until the truck comes to pick them up 3 days later. The skis are delivered to Bondo Bikes where they are put in storage for 2 days and then adhered to the rest of the bike. This work-in-process inventory in the manufacturing process of the bike is one day.
Cost information:
100 bikes a day
5 day cycle time at Bondo Bikes
$5,000/Bike
Warehouse costs are based on inventory carrying costs of 20% of the value of the parts
Value of pellets needed for the spokes is $5? bike, Spokes are $10? bike
 A customer orders a bicycle. The Order gets transmitted electronically to

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