The Platinum Seating Company had been in the furniture business since 1975. They had focused the business mainly on office furniture. Over the years they had developed a niche market in high-end office chairs. They had a reputation for quality craftsmanship and their customers were willing to pay a higher price for their brand name. The majority of the employees have worked for the company for many years and are fully cross trained on all operations. Platinum Seating Company has a philosophy that "the company's success is based on the employees' commitment" and that "together anything can be accomplished." Input from the employees is valued and acted upon where appropriate. The employees are paid $15.50 per hour, benefits added on another 29% and they work 40 hours per week. There are currently 15 employees that typically can produce up to 225 chairs per week. The employees have come forward with a suggestion to work longer hours in the winter (fourth quarter) and work shorter hours in the summer (second quarter). They are suggesting going to a 10-hour shift in the 1st quarter and a 6-hour shift in the 3rd quarter. In essence they will be increasing their production by 25% in the 1st quarter and reducing that production by 25% in the 3rd quarter. The cost to carry inventory is $5 per quarter. Conestoga College's wood working program approached Platinum Seating about hiring "co-op" students in the fall semester. They looked at this as a win-win, where experienced woodworking craftspeople would mentor students to pass their artistic abilities on to the students. Co-op wages are available on the Conestoga College website. The manufacturing facility itself is still fairly small at 5000 square feet. There is a small warehouse that stores finished chairs that can accommodate up to 2000 chairs. The cost of carrying inventory is $10 per chair per quarter. When running short of storage space, Platinum Seating has used a public warehouse where it can get storage space in increments of 200 finished chairs storage for an additional cost of $1000 per quarter. So, for example, 1-200 chairs for $1000; 201-400 chairs for $2000, and so on. The Platinum Seating Company was approaching another year-end. It was time to review what had happened over the past year and set a budget for the next fiscal year. Q9: Prepare the following inventory records demonstrating different ordering techniques. Hint - consider all elements of lead time. (9 marks) 1. 2. Executive Wheels - 6529 'Order Point with reserve stock' 3. Base Assembly - 2370 'Min/Max' 4 Order Quantity Reserve Opening inventory Screws - 8500 'Periodic Review with Target' = 1000 = 2-week usage = 1500 Review after 1st issue and every 5 weeks after. Safety stock = 5000 Opening inventory = 10000 Place two orders for each part. For part usage, reference your material plans. Safety Stock = 500 Maximum = 3000 Opening inventory = 1700