In a word document answer this question;

1. Would you suggest this company continue to the inventory system as it is, or change it to a JIT system. Justify your answer with the financial impact of the decision.

To submit your answer, click on the title of the assignment and it will give you a place to submit your word document.

Item	Average distance from vendor (in miles)	Number of units used each week	Current lot size purchased	Unit cost	Average freight cost per unit
Gas range	1,145	10	200	$100	$20
Toilet	606	10	240	$80	$18
Pump	26	56	125	$16	$3
Refrigerator (large)	22	6	120	$110	$20
Refrigerator (small)	22	7	15	$95	$15
Foam cushion	490	675	1,500	$8	$2
CB radio (type D)	1,800	9	24	$136	$11
Dome lights	3	824	1,720	$2	None
Awning bracket	48	540	1,200	$4	$1
Insect screen	159	570	1,240	$7	$1

Current system (continued)

Item	Safety stock	Average inventory	Total inventory	Inventory cost	Inventory carrying charges	Inventory maintenance cost
Gas range	40	100	140	$62,400	$3,360	$65,760
Toilet	40	120	160	$50,960	$3,136	$54,096
Pump	56	63	119	$55,328	$450	$55,778
Refrigerator (large)	6	60	66	$40,560	$1,716	$42,276
Refrigerator (small)	7	8	15	$40,040	$319	$40,359
Foam cushion	1,350	750	2,100	$351,000	$4,200	$355,200
CB radio (type D)	36	12	48	$68,796	$1,411	$70,207
Dome lights	824	860	1,684	$85,696	$674	$86,370
Awning bracket	540	600	1,140	$140,400	$1,140	$141,540
Insect screen	1,140	620	1,760	$237,120	$2,816	$239,936

Using JIT

Item	JIT lot size	Unit cost	Average freight cost per unit (surface)	Inventory maintenance cost
Gas range	10	$105	$22	$66,040
Toilet	10	$100	$18	$61,360
Pump	7	$15	$4	$55,328
Refrigerator (large)	6	$113	$25	$43,056
Refrigerator (small)	1	$85	$15	$36,400
Foam cushion	75	$7	$3	$351,000
CB radio (type D)	3	$130	$26	$73,008
Dome lights	36	$4	None	$171,392
Awning bracket	60	$5	$1	$168,480
Insect screen	50	$7	$2	$266,760