Jill’s Job Shop buys two parts ( Tegdiws and Widgets) for use in its production system from two different suppliers. The parts are needed throughout the entire 52- week year. Tegdiws are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. Widgets are ordered from a supplier who stops by every three weeks. Data for both products are as follows:

a. What is the inventory control system for Tegdiws? That is, what is the reorder quantity and what is the reorder point?

b. What is the inventory control system for Widgets?

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ITEM TEGDIW WIDGET 10,000 5,000 Annual demand Holding cost (% of item cost) Setup or order cost Lead time 20% 20% $150.00 $25.00 4 weeks 1 week 5 units 55 units Safety stock Item cost $10.00 $2.00