Question: Component Commonality (Demand Aggregation) Product 1: weekly demand is normally distributed with: - Mean = 60 units per week Standard deviation = 40 units per

Component Commonality (Demand Aggregation) Product 1: weekly demand is normally distributed with: - Mean = 60 units per week Standard deviation = 40 units per week Product 2: weekly demand is normally distributed with: Mean = 40 units per week Standard deviation = 30 units per week Lead time is 4 weeks Cycle service level is 90% Suppose currently two products use unique batteries, but we decide to use same (common) battery for both products (Q1) What are the weekly demand and standard deviation of weekly demand for the common battery? DC = D. + D2 (69) = (01)2 + (p2)2 06 = Vop)2 + (Op2)2 (Q2) What is the standard deviation of demand during the lead time for the common battery? OL = - 1x(0)2 + (DC)2X(5.)2 Lx)2 ) . (93) What is safety inventory of the common battery to achieve 90% CSL? ss = NORMSINV(CSL)XO

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