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A periodic review method of inventory control is to be used for two products that are to be purchased from the same supplier at the

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A periodic review method of inventory control is to be used for two products that are to be purchased from the same supplier at the same time. The following data have been collected for these items: Products A Weekly demand forecast, units Forecast error (std. dev.), units Lead time, weeks 1,600 650 90 60 1.5 Purchase price, dollar/unit In-stock probability during lead time plus order cycle Carrying cost, percent/year Procurement cost per order with common order cost, dollar/order $2.5 $2.0 93% 82% 26% 22% $15 $10 $80 $80 Stockout cost, dollar/unit $0.9 $0.8 1 year = 52 weeks Assume that the demand is normally distributed. 1. Design the control system for these products. State how the control system will work. 2. What is the average inventory level for each of these items? 3. What is the customer service level that can be expected for each of these items? 4. What is the total relevant cost for this design

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