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Terminator, Inc. manufactures a motorcycle part in lots of 250 units. The raw materials cost for the part is $150, and the value added in manufacturing 1 unit from its components is $300, for a total cost per completed unit of $450. The lead time to make the part is 3 weeks, and the annual demand is 4,000 units. Assume 50 working weeks per year.
- How many units of the part are held, on average, as cycle inventory? What is its value?
- How many ii nit S of the part are held, on average, as pipeline inventory? What is its value?
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