INVENTORY CONTROL MODELS
Web Case Examine: Drake Radio
Radio bought its begin throughout World Conflict I by manufacturing radio communications
tools for the army. By the beginning of World Conflict II, Drake was one of many
largest suppliers of army communications tools. After World Conflict II,
Drake diversified into the next three market areas:
CB radios and
its expertise and expertise gained from manufacturing army communications
tools, Drake grew to become often called among the best producers of novice radio
tools. Drake particularly excelled with its single sideband radios and its
two-meter radios for novice use. Though these radios had been costly, they had been
of the best high quality and all the time in demand.
growing CB radios, nonetheless, Drake determined to mass produce low cost items that
would have a large attraction and a low value. To assist defend its good title in
army communications tools and novice (ham) radios, these cheap
CB radios had been marketed beneath the model title of Hustler.
1975, George Populas, the president of Drake Electronics, determined to
examine the chances of coming into into the market of dwelling stereo
programs. These stereo programs could be prime quality, extremely priced, and
marketed with the Drake title. Probably the most exceptional stereo system that Drake
manufactured was the DR-2000, which was a classy stereo receiver. The
demand for the DR-2000 was pretty fixed from month to month, with calls for of
801, 807, 795, and 797 items in January, February, March, and April,
DR-2000 had all of the options of a stereo receiver that carried a price ticket of
$765. A few of these options included the power to attach 4 completely different
speaker programs, loudness management, flatness management, mix management, and
full digital learn out. In fact, it could possibly be related to a number of
receivers, tape items, turntables, and so forth. As an alternative of getting a bass management
to control the low frequencies and a treble management to control the excessive
frequencies, the DR-2000 had 5 separate controls that regulated 5
frequency ranges. One management regulated frequencies from zero to 500 Hz; one other
management regulated frequencies from 500 to five,000 Hz; a 3rd regulated the
frequencies between 5,000 to 10,000 Hz; a fourth regulated frequencies between
10,000 to 15,000 Hz; and a fifth, the frequencies between 15,000 and 50,000 Hz.
of the most important promoting options of the DR-2000 was its capacity to make use of the
DR-2000 RC, the distant management gadget for the stereo receiver. As a result of all of
the switching and elements had been strong state, the engineers of Drake
Electronics had been in a position to develop a whole distant management station that was no
larger than a cigarette pack. The essential thought for the distant management gadget was
borrowed from that of tv, and Drake engineers had been in a position to management all
capabilities by the DR-2000 RC. Every distant management field price $75, and many individuals
bought a couple of unit. The power to manage the stereo system from
actually wherever in a home was one of many system’s largest promoting options,
nevertheless it additionally precipitated some issues in properties with youngsters. Because of this, Drake
developed a grasp management unit that oldsters may preserve and that will override
all different distant management items and the controls on the stereo receiver.
excellent function of the DR-2000 was its fully modular design, proven in
Determine 1. Every module was contained in a totally separate, coloration coded field.
By unlatching 4 hidden slides, the highest of the cupboard could possibly be eliminated,
giving entry to all the modules.
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management module contained a microprocessor chip that monitored the operations of
all the different modules. If one of many modules stopped functioning appropriately,
the management module would activate a warning gentle on the entrance panel that
indicated which module was not working correctly. The proprietor may pull out the
acceptable module and change it with a brand new module from a close-by Drake dealership.
If a Drake dealership was not shut, Drake promised two-day, COD supply. The
malfunctioning module may even be despatched to Drake or given to a Drake
dealership to be repaired or for a refund.
of the modules, besides the FM tuner, had been manufactured by Drake and saved
till they had been wanted. Annual carrying price was estimated to be 25 % for
all modules. The FM tuner modules had been equipped by Collins Electronics, which
additionally adjusted and sealed them. The price to position an order was estimated at $50
per order, and the time to obtain an order from Collins was roughly two
weeks. Collins additionally supplied amount reductions on its FM tuners, as proven in Desk
zero to 100 $25
to 500 $24
and over $22
Electronics additionally manufactured FM tuners appropriate with the DR-2000. Due to
its location in Japan, the time to obtain an order was about two months, and
the ordering price was $100 due to the extra required paperwork. The
amount reductions supplied by Nitobitso is proven in Desk 2.
to 800 $23
to 2,000 $22
and over $21
1. What’s the reorder level for Collins and Nitobitso?
2. Would you suggest that Drake get FM tuners from Nitobitso? Clarify
three. The whole lot else being equal, which provider of FM tuners would you
need with a fluctuating demand?