Question: A manager must set up inventory ordering systems for two new items, Gadget and Widget. Gadget is ordered from a supplier and is delivered at

A manager must set up inventory ordering systems for two new items, Gadget and Widget. Gadget is ordered from a supplier and is delivered at once, while Widget is produced in-house in batches of fixed size. The company operates 52 weeks a year and demand for each item is normally distributed. The company uses a continuous inventory system. The manager has gathered the following information about the items. GadgetWidgetAverage demand7,000 units per year50 units per weekStandard deviation80 units per week15 units per dayUnit cost (C)$28$350Production rate (pt)-100 units per dayOrdering cost/Setup cost (Co)$750$4,650Annual carrying cost (Cc)18%25%Lead time (Lt)3 weeks1 weekService level ()99.5%92% a. Compute the optimal order quantity for item Gadget.b. How many orders of item Gadget will be placed per year?c. What should the safety stock be for item Gadget?d. Compute the optimal order quantity for Widget.e. When should the manager reorder item Widget?f. Determine the length of each production run of item Widget, in days.g. What is the time between two consecutive orders of Widget, in weeks?

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