Exercise $9$

Russel, Lda $($RSS$)$ imports sweets. Drops are supplied from Spain by BARCINO, a company

located in Barcelona. Both RSS and BARCINO work $52$ weeks a year. RSS has its warehouse in

Carregado. From this warehouse it supplies its $4$ retail stores. RSS receives daily orders from the

stores from Monday to Saturday. Stores are open from Monday to Saturday, from $10$:$00$ to

$22$:$00.$ The warehouse supplies one day after the order, $6$ days a week. BARCINO supplies every

Tuesday before $10$:$00$ at the central warehouse, according to the orders placed on Friday until

$10$:$00.$ Note that the warehouse works $6$ days a week, from Monday to Saturday. The daily

demand from each store, and daily standard deviation in demand, in boxes, are as follows

$($demand $($standard deviation$))$:

Note: RSS places orders in boxes, is supplied in boxes and delivers in boxes

a$)$ Today is Friday $9$:$00$am$.$ RSS Logistics Director asks you to identify how many boxes should

be ordered.

b$)$ Knowing in advance that BARCINO is willing to change the time between orders and keep

lead time, the Director of RSS is not satisfied with the average inventory level of drops as

they consider that it is too high. The following suggestion is made:

"Without changing the inventory model, I think we should change our time between orders

$($TBO$)$ to become closer to the economic time between orders $($TBO$*).$ I think that this would

decrease the average level of inventory of drops". Comment on this statement and justify

your position.