Mike decided to start his analysis and development of solutions on the two items for which Art had already provided demand history. He felt that if he could analyze and correct any problems with those two parts, he could expand the analysis to most of the others. The two items on which he had history and concentrated his initial analysis were the FB$378$ Fender Bracket and the GS$131$ Gear Sprocket. Northcutt Bikes purchases the FB$378$ from a Brazilian source. The lead time has remained constant, at three weeks, and the estimated cost of a purchase order for these parts is given at $$35$ per order. Currently Northcutt Bikes uses an order lot size of $120$ for the FB$378$ and buys the items for $$5$ apiece.

The GS$131$ part, on the other hand, is a newer product only recently being offered. A machine shop in Nashville, Tennessee, produces the part for Northcutt Bikes, and it gives Northcutt Bikes a fairly reliable sixweek lead time. The cost of placing an order with the machine shop is only about $$15,$ and currently Northcutt Bikes orders $850$ parts at a time. Northcutt Bikes buys the for $$10\mathrm{.}75.$

Following is the demand information that Art gave to Mike on his first day for the FB$378$ and the GS$131$: