313 points) If the order quantity in the previous question is different than the sal forecast, then explain why Consolidated Distribution Recall from lecture the example of direct delivery versus consolidated distribution. In the direct delivery scenario, a single supplier ships directly to 100 retail stores with an 8-week lead time to each store. Each retail store faces normally distributed customer demand with a mean of 2 units/month and a standard deviation of 1.41 units/month (assume 4 weeks in a month). In the consolidated distribution scenario, the supplier ships directly to a regional distribution center (DC) which then ships directly to each retail store. The lead time between the supplier and the DC is 8 weeks. The DC and the retail stores use an order-up-to level inventory policy with a target service level of 95 percent. Question 4 (13 points) In lecture, we demonstrated that when the lead time benween the DC each retail store is I week, the average inventory level in the consolidated distribution scenario is 2 less than the average inventory level in the direct delivery scenario, thus providing some motivation for consolidating distribution despite the lengthened supply chain. What lead time between the DC and each retail store equalizes this benefit, i.e., what lead time results in equal average inventory levels in each system? Question 5 (11 points) Reducing average inventory levels via lead time pooling is one reason to consider consolidated distribution over direct delivery. But, as the previous question implies, this l store increases. Yet, many supply ins implement consolidated distribution even if the average inventory level is higher than that ct delivery scenario. Briefly describe alternative reasons firms might opt for consolidated benefit decreases as the lead time between the DC and each retai of a dire oPerute distribution. Delayed Differentiation at Sherwin-Williams Paint mixing is an example of delayed differentiation: product variety is achieved by mixing dif- 313 points) If the order quantity in the previous question is different than the sal forecast, then explain why Consolidated Distribution Recall from lecture the example of direct delivery versus consolidated distribution. In the direct delivery scenario, a single supplier ships directly to 100 retail stores with an 8-week lead time to each store. Each retail store faces normally distributed customer demand with a mean of 2 units/month and a standard deviation of 1.41 units/month (assume 4 weeks in a month). In the consolidated distribution scenario, the supplier ships directly to a regional distribution center (DC) which then ships directly to each retail store. The lead time between the supplier and the DC is 8 weeks. The DC and the retail stores use an order-up-to level inventory policy with a target service level of 95 percent. Question 4 (13 points) In lecture, we demonstrated that when the lead time benween the DC each retail store is I week, the average inventory level in the consolidated distribution scenario is 2 less than the average inventory level in the direct delivery scenario, thus providing some motivation for consolidating distribution despite the lengthened supply chain. What lead time between the DC and each retail store equalizes this benefit, i.e., what lead time results in equal average inventory levels in each system? Question 5 (11 points) Reducing average inventory levels via lead time pooling is one reason to consider consolidated distribution over direct delivery. But, as the previous question implies, this l store increases. Yet, many supply ins implement consolidated distribution even if the average inventory level is higher than that ct delivery scenario. Briefly describe alternative reasons firms might opt for consolidated benefit decreases as the lead time between the DC and each retai of a dire oPerute distribution. Delayed Differentiation at Sherwin-Williams Paint mixing is an example of delayed differentiation: product variety is achieved by mixing dif