Question: Demand information (per week) Location A: Normal with mean 250, std dev. 90 Location B: Normal with mean 180, std dev. 70 Configuration 1 :

Demand information (per week)

Location A: Normal with mean 250, std dev. 90

Location B: Normal with mean 180, std dev. 70

Configuration 1: Warehouses at location A and B

When available, use inventory to satisfy customer orders

Service level target of 97%

Lead time factory-to-location is 1 week, H = $0.27 per unit per week

Configuration 2: Warehouse location C (Aggregate demand of A & B)

All other costs and parameters same as the prev. locations

How much safety inventory in each configuration?

Find ROP & SS at Warehouse A and B separately.

Find ROP & SS at Warehouse C.

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