Table 1 Inventory records show the following: Item Category # unique variations Average Cost Avg Monthly Vol Frames (C) 3 $ 45.00 100 Derialer 5 $ 20.00 1000 Spokes 3 $ 0.14 22000 Tire Tubes 3 $ 2.00 1000 Pumps 3 $ 11.00 170 Tires (26) 6 $ 11.00 170 Frames (W) 9 $ 60.00 30 Rims (20) 2 $ 1.75 200 Chains 2 $ 1.00 500 Rims (24) 3 $ 2.00 200 Frames (M) 12 $ 55.00 500 Tires (24) 6 $ 4.00 100 Rims (26) 3 $ 2.10 170 Fenders 6 $ 10.00 35 Bells 2 $ 3.00 100 Lights 6 $ 3.00 90 Forks 24 $ 40.00 55 Tire Valves 2 $ 0.08 1000 Tires (20) 6 $ 3.00 80 Reflectors 27 $ 0.05 100 1) Use Table 1 to identify the best statement. A) Items Frames(M) and Derialer fall in the same category of an ABC analysis. B) Items Frames(C) and Derialer fall in the same category of an ABC analysis. C) Items Frames(M) and Pumps fall in the same category of an ABC analysis. Items Reflectors and Pumps fall in the same category of an ABC analysis. 2) Use Table 1 to identify the best statement. Pumps are in category C Reflectors are in category B Reflectors are in category A Spokes are in Category A 3) What is the cumulative dollar volume percentage of Frames, Derialer, and Forks? 0.5 0.75 0.86 0.96 4. Shipments of Product X from a plant to a wholesaler are made in lots of 500 units each. The wholesaler's average demand for X is 30 units per week. The lead time from the plant to the wholesaler is 2 weeks. The wholesaler pays for the shipments when they leave the plant. Safety stock is a 2-week supply, and the wholesaler anticipates the Halloween and Thanksgiving sale to be an extra 1500 units. What is the average aggregate cycle inventory? Scenario 1 The Mwongola Company is a small manufacturing company that uses gear assemblies to produce four different models of mountain bikes. One of these gear assemblies, the "Smooth Shifter," is used for the two most expensive of Burdell's four models and has an estimated annual demand of 300 units. Burdell estimates the cost to place an order is $40, and the holding cost for each assembly is $60 per year. The company operates 250 days per year. 5. Use the information in Scenario 1. What is the economic order quantity for the Smooth Shifter? A) less than or equal to 40 units B) greater than 40 units but less than or equal to 80 units C) greater than 80 units but less than or equal to 120 units D) greater than 120 units 6. Use the information in Scenario 1. What is the cycle length (time between orders) when orders are placed using the EOQ quantity? A) less than or equal to 5 days B) greater than 5 days but less than or equal to 10 days C) greater than 10 days but less than or equal to 15 days D) greater than 15 days Scenario 2 A distributor of computer monitors purchases the monitors from an overseas supplier under a continuous review system. The average demand for a popular computer monitor is normally distributed with a mean of 50 units a day and a standard deviation of 10 units a day. It costs $75 to process each order and there is a 16-day lead time. The holding cost for each monitor is $20 per year and the distributor wishes to maintain a 90% service level. The distributor operates 300 days in a year. 7. Use the information in Scenario 2. What is the reorder point R to satisfy a 90% cycle-service level? A) less than or equal to 750 units B) greater than 750 units but less than or equal to 1,000 units C) greater than 1,000 units but less than or equal to 1,250 units D) greater than 1,250 units 8. Use the information in Scenario 2. What service level does a reorder point of 825 imply? A) less than or equal to 70% B) greater than 70% but less than or equal to 75% C) greater than 75% but less than or equal to 80% D) greater than 80% 9. Use the information in Scenario 2. What is the annual cost of holding the safety stock necessary to maintain the 90% service level? A) less than or equal to $900 B) greater than $900 but less than $1,000 C) greater than $1,000 but less than $1,100 D) greater than $1,100 10. A distributor of computer monitors purchases the monitors from an overseas supplier under a continuous review system. The average demand for a popular computer monitor is normally distributed with a mean of 50 units a day and a standard deviation of 10 units a day. It costs $75 to process each order and there is a 16-day lead time. The holding cost for each monitor is $20 per year and the distributor wishes to maintain a 90% service level. The distributor operates 300 days in a year. The distributor would like to use a periodic review inventory system to manage their inventory. What is the standard deviation of demand over the protection interval? A) less than or equal to 30 units B) greater than 30 units but less than or equal to 40 units C) greater than 40 units but less than or equal to 50 units D) greater than 50 units