Global Music Corp. produces J-Pods, music players that can download thousands of songs. Global Music forecasts that demand in 2017 will be 30,000 J-Pods. The variable production cost of each J-Pod is $49. In its MRP system, due to the large $15,000 cost per setup, Global Music plans to produce J-Pods once a month in batches of 2,500 each. The carrying cost of a unit in inventory is $16 per year. Read the requirements .... Requirement 1. Using the MRP system, what is the annual cost of producing and carrying J-Pods in inventory? (Assume that, on average, half of the units produced in a month are in inventory.) Begin by determining the formula, then calculate the annual cost of producing and carrying J-Pods in inventory, using an MRP system. (Round your answer to the nearest whole dollar.) Cost of producing and carrying Requirements 1. Using the MRP system, what is the annual cost of producing and carrying J-Pods in inventory? (Assume that, on average, half of the units produced in a month are in inventory.) 2. A new manager at Global Music has suggested that the company use the EOQ model to determine the optimal batch size to produce. (To use the EOQ model, Global Music needs to treat the setup cost in the same way it would treat ordering cost in a traditional EOQ model.) Determine the optimal batch size and number of batches. Round up the number of batches to the nearest whole number. What would be the annual cost of producing and carrying J-Pods in inventory if it uses the optimal batch ize? Compare this cost to the cost calcul requirement 1. Comment briefly 3. Global Music is also considering switching from an MRP system to a JIT system. This will result in producing J-Pods in batch sizes of 200 J-Pods and will reduce obsolescence, improve quality, and result in a higher selling price. Global Music will reduce setup time and setup cost. The new setup cost will be $100 per setup. What is the annual cost of producing and carrying J-Pods in inventory under the JIT system? 4. Compare the models analyzed in the previous parts of the problem. What are the advantages and disadvantages of each? Clear all Check