Inventory Models: An artist’s supply shop stocks a variety of different items to satisfy the needs of both amateur and professional artists. In each case described below, what is the appropriate inventory control model that the store should use to manage the replenishment of the item described below? If appropriate, explain your choice. Choose from the following models:
(A) EOQ, (B) Wagner-Whitin, (C) Newsvendor, (D) Base-stock, (E) (Q, r), (F) Other type of model
a) A highly volatile paint thinner is ordered once every three months from the supplier. Cans not sold during the three-month period are discarded. The demand for the paint thinner exhibits considerable variation from one three-month period to the next.
b) A white oil-base paint sells at a fairly regular rate of 600 tubes per month and requires a six-week order lead time. The paint store buys the paint for $1.20 per tube.
c) Burnt sienna oil paint does not sell as regularly or as heavily as white. Sales of the burnt sienna vary considerably (and randomly) from one month to the next. The useful lifetime of the paint is about two years, but the store sells almost all of the paint prior to the two-year limit. Fixed order placement costs for low volume items such as burnt sienna oil paint are significant.