Question: Demand information (per week) Region1: Normal with mean 250, std dev. 90 Region 2: Normal with mean 180, std dev. 70 Configuration 1: Warehouses at

Demand information (per week)
Region1: Normal with mean 250, std dev. 90
Region 2: 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?
-1: Find the ROP and SS at each warehouse
-2: Find the ROP and SS at new warehouse
-Compare option 1 and option 2 for the benefits

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