KLF electronics evaluating potential for implementing periodic review inventory policy. However cost is primary consideration without compromising service level. Assuming that time between order (review period r) remains same as continuous review system for each regional warehouse, compute and describe its inventory management policy and associated cost for current distribution system (Figure 1a). Ignore inbound and outbound transportation cost. Provide answers and calculation for Base stock, safety stock, average inventory level, inventory holding cost per week, ordering cost per week and total cost per week. Compare your answers with answers obtained in question 1 and report percentage change in inventory holding cost per week, ordering cost per week and total cost per week for maintaining all the five regional warehouses. Comment on your findings.

	r	Base Stock	SS	Avg Inv	Inv Cost	Ord Cost	Tot Cost
Atlanta
Boston
Chicago
Dallas
LA
Total cost of Periodic Review Policy for system 1a
Total cost of Continuous Review Policy for system 1a
Percentage Change in the cost