The Controller for Warner Mfg

question 43

Essay

The controller for Warner Mfg. is trying to implement some of the characteristics of a just-in-time (JIT) inventory system. She has accumulated data on Warner's present inventory system and obtained some projections and estimates of what the results of a JIT system would be. The inventory holding cost is $0.75 per unit, per month. Warner currently purchases 120,000 units every four months. Under a JIT system Warner would purchase 30,000 units every month. The monthly inventory schedule and the controller's estimate for a JIT system are provided below: (Assume the above trend continues throughout the year.)
Required: Which system should Warner use, and why?

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Definitions:

Zygomatic Arch

The zygomatic arch, composed of the zygoma (cheekbone) and the temporal bone, forms the prominence of the cheek and the outer side of the eye socket.

Temporalis Muscle

A broad, fan-shaped muscle on each side of the head that assists in chewing by elevating the mandible to close the mouth.

Paired

Refers to something that comes in a set of two, used together or connected in some way.

Temporal

relates to time or the sequential order of events.