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.$)$

A new manager at TechWorks has suggested that the company use the EOQ model to

determine the optimal batch size to produce. $($To use the EOQ model, TechWorks 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 size? Compare this

cost to the cost calculated in requirement $1.$ Comment briefly.

TechWorks is also considering switching from an MRP system to a JIT system. This will

result in producing J$-$Pods in batch sizes of $200J-$Pods and will reduce obsolescence,

improve quality, and result in a higher selling price. TechWorks 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?

Compare the models analyzed in the previous parts of the problem. What are the

advantages and disadvantages of each?