JACKSON’S WAREHOUSE (This case can best be assessed only by those familiar with STORM software, although other business analysis software programs might be used. The terminology and approach are not exactly the same as used here, especially the use of Sigma lead times, which are measured in units and can be explained as measuring the “dipping” into safety stocks. Also, some of the topics will be new to readers of this text.) Question 1: Perform an ABC analysis. Is it of much use if the firm maintains only 12 SKUs? Why or why not? Question 2: Find the reorder point for each of the SKUs expressed as the point to which existing inventory must drop to trigger a replenishment order. Question 3: How large a safety stock should be maintained for each SKU? Question 4: How much money will Jackson have as its average investment in inventory? The printout follows: Question 5: Interest rates drop, and Jackson’s now assumes that its carrying costs are 20/%, rather than 30/%. How will this change your answers to questions 2, 3, and 4, if at all? Explain. Question 6: Disregard your answers to questions 4 and 5. Answer question 3 again, this time assuming that Jackson’s wants to keep enough of each SKU to fill orders 90/% of the time.