3. The BCD Company has successfully implemented JIT internally, and now wishes to convert one of its main suppliers to JIT as well. As a test of feasibility, the firms have selected one item made by this supplier for BCD. The supplier currently manufactures and delivers this item in batches of 6,000 with a lead time of two weeks. The current price paid is $150/unit, and the average usage rate at BCD is 250 units per day. Under JIT, the kanban container size would be 100 units, 10 percent safety stock, and lead time of two weeks (10 days).

a. What is the current investment in work-in-process inventory for this item at BCD (assume average inventory is Q/2)?

b. What is the change in investment if the proposed JIT system is implemented?

c. A consulting study indicates that for an additional $100,000 investment, lead time could be reduced from two weeks to one week. Evaluate the feasibility of this investment.