Assignment - Inventory Management Problem (Jacobs & Chase, 14th ed., p. 551) 41. Alpha Products, Inc., is having a problem trying to control inventory. There is insufficient time to devote to all its items equally. Here is a sample of some items stocked, along with the annual usage of each item expressed in dollar volume. a m n Item Annual $ Usage $30,200 b 27,000 93,100 d 1,500 1,900 f 30,100 1,700 h 2,600 3,300 1,600 e Item Annual $ Usage k $1,800 20,100 111,100 3,100 o 600 P 114,100 2,700 28,100 2,900 3,200 r S a. Can you suggest a system for allocating control time? b. Specify where each item from the list would be placed. 27. Sarahs Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point system to manage inventory of this standard muffler. Use the following information to determine the best order size and the reorder point. Ordering cost $40 per order Service probability 90% Annual demand 5,600 mufflers Standard deviation of 5 mufflers per daily demand working day Item cost $50 per muffler Annual holding cost 35% of item value Lead time Working days 3 working days 300 per year