Lieutenant Commander Data is planning to make his monthly (every 30 days) trek to Gamma Hydra City to pick up a supply of isolinear chips. The trip will take Data about two days.

Before he leaves, he calls in the order to the GHC Supply Store. He uses chips at an average rate of fi ve per day (seven days per week) with a standard deviation of demand of one per day. He needs a 98 percent service probability. If he currently has 35 chips in inventory, how many should he order? What is the most he will ever have to order?

8 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:

ITEM TEGDIW WIDGET Annual demand Holding cost (% of item cost)

Setup or order cost Lead time Safety stock Item cost 10,000 20%

$150.00 4 weeks 55 units

$10.00 5,000 20%

$25.00 1 week 5 units

$2.00

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?