What are the pros and cons of using the P system compared with using the Q system for this part?
The Toyota dealer from problem 3 is considering installing either a Q or a P system for inventory control. The standard deviation of demand has been 4 units per month, and the replenishment lead time is two months. A 95 percent service level is desired. a. If a continuous review system is used, what is the value of Q and R that should be used? b. If a periodic review system is used, what is the value of P and T that would be applicable? c. What are the pros and cons of using the P system compared with using the Q system for this part?
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