6. The distribution of Blues Brothers’ Sunglasses is from the plant in Joliet to two warehouses and then to the customers. The distribution pattern is as follows:

For the purpose of analysis, assume that each warehouse will sell exactly 40 cases of Blues Brothers’ Sunglasses per week. Inventory carried either at the plant or at the warehouse locations costs 25 cents per week per case (based on Friday night inventory). The ordering cost is $15 per order at each facility, and it takes exactly one week to transport the product from the plant to either of the two warehouses or to produce the product. The beginning inventory at each warehouse is 40 units, and the beginning inventory at the Joliet plant is 140 units. No safety stock is planned at any location.

a. On the basis of a record of seven weeks, determine the inventory carrying cost plus setup cost per week at Joliet plus both warehouses managing the system with EOQ at all locations. You can ignore the in-transit inventory for the EOQ calculation, but include it in the cost calculations.

b. Determine the total inventory carrying cost and setup cost per week, using DRP to manage the system based on the same seven-week record.

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Warehouse I Customers Joliet plant Warehouse 2 E Customers