26) Chronotronics produces two models of clock radios, the X-100 and the X-250 deluxe. Both products are currently packaged in a single-wall corrugation. Through close observation, the firm has discovered that 1.5 percent of both X-100s and X-250s are damaged between packaging and customer delivery. Chronotronics can package either model, or both, in double-wall corrugated fiberboard, which would reduce product damage by half. The current single-wall packaging costs $1.10 per unit. Double-wall packaging costs 20 percent more. The X-100 and X-250 have market values of $45 and $75, respectively. Damaged units are a total loss. Chronotronics sold 14,000 X-100s and 8,000 X-250s last year. Forecasts indicate consistent sales for the X-100 and a 7 percent increase in X-250 sales over the next year. Note: Round up for whole units lost. a. From a least-cost perspective, should Chronotronics utilize double-wall corrugation with the X-100 next year? b. From a least-cost perspective, should Chronotronics utilize double-wall corrugation with the X-250 next year? c. What options, other than packaging changes, might Chronotronics consider? 27.) Your firm is planning to introduce a new product line. Your task is to determine the inventory implications of the new product. The typical product will ship an average of 25 units per day from the firm's central DC. Historical sales patterns indicate that the standard deviation of daily sales should be approximately 3. The typical performance cycle for comparable products has been a mean of seven days and a standard deviation of 2. a. Assuming a replenishment quantity from the plant of 300 units, what are the safety stock and resulting average inventory for a 95 percent case fill rate? b. What are the inventory implications (safety stock and average inventory) of increasing the case fill rate objective to 99 percent? c. What would be the inventory implications for daily replenishment with a 99 percent fill rate objective, assuming that the same level of demand and performance cycle uncertainty is maintained? 28. )As the logistics representative on a manufacturer's sales team, you have been asked to quantify the benefits that can be sold to a customer using more consistent service and transportation. The customer wants 99 percent case availability from its distribution centers that are resupplied from the manufacturer. The average daily demand in cases from the customer's DC is 1,500 units with a standard deviation of 250. Historically, the replenishment performance cycle has been 10 days with a standard deviation of four days. The customer has traditionally used a 20 percent inventory carrying cost, and the average value of each case is $30. The customer orders weekly an order quantity of 7,000 units. a. What is the average inventory and annual carrying cost for the current situation? b. What is the average inventory and carrying cost impact of reducing the manufacturer's performance cycle variation by two days? c. How does reducing the performance cycle variation by two days compare with reducing the average performance cycle length by two days in terms of average inventory and inventory carrying cost? Page 418