An electronics retailer sells six different variants of printers in the form of finished products. All these printers are similar except in their power supply. The retail manager is considering postponement of the assembly of the power supply in the printers and keep inventory of component form. Weekly demand for one of the six variants is normally distributed with a mean of 750 and a standard deviation of 300. Each of the remaining five variants has a weekly demand of 10 and a standard deviation of 7. The retailer is considering a cycle service level of 95 percent. The replenishment lead time is 7 weeks. Each printer costs $350 and postponing the component commonality increases the printer cost to $352.5. Inventory is managed using a continuous review policy. The annual holding cost is 25 percent. Do you think the retailer should use component commonality? If yes, should it use component commonality for all variants or for only the five low-demand variants? Please show your analysis and justify your answer.

Answer rating: 100% (QA)

Retailers supplychain difficulties have largely arisen as big shifts in consumer behavior and steppedup health restrictions have rippled back through their operations One noteworthy shift has been an ... View the full answer