J & G Distributors

Sarah is facing with few issues on which certain decisions have to be taken. She
gathered some data and this data needs to be analysed to arrive at optimum
solutions to different problems. For each of the key issues our calculations and
recommendations have been given below.
Yes she should keep the (Q.r.) policy framework, however for certain items which
have a lot of variation in the requirements over the weeks, instead of the (Q.r.)
policy framework, the company should adopt a time based approach where, the
inventory is checked periodically to maintain a certain level of quantity of the
items at all times. An example for this would be the Special Resistor, J&G part
number 4915082. The demand for this item varies more than the EOQ almost
50% of the times, however the upper limit of the demand is also known, so we
can decide on a periodic ordering time when the inventory would be replenished
on regular intervals. Moreover since there are no advantages of ordering the
parts together to save shipping, the items can be ordered as frequently as
required in a varying quantity if required.