Return to the problem data in Exercise 10. Assume that Motorola follows a periodic review policy. Given
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Return to the problem data in Exercise 10.
Assume that Motorola follows a periodic review policy. Given lot sizes by sea and air, Motorola would have to place an order every 20 days using sea transport but could order daily using air transport.
a. Assume that Motorola follows a periodic review policy.
What order-up-to level and safety inventory should the warehouse aim for when using sea or air transportation?
How many days of safety inventory will Motorola carry under each policy?
b. How many days of cycle inventory does Motorola carry under each policy?
c. Under a periodic review policy, do you recommend sea or air transportation? Does your answer change if Motorola has ownership of the inventory while it is in transit?
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