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There is a Hospital that they provide different types of masks to hospitals in HK's 9 districts. For the he Hospital faces two warehousing options. Option One is to use a decentralized system of 9 warehouses, each of which serves a region. Each warehouse is independent of other warehouses for ordering. Each warehouse faces an average lead-time demand of 30,000 face masks per week, with a standard deviation of 2,000. Option two is to use a centralized warehouse to meet the needs of 9 regions. Assume that the replenishment lead time for a week is constant and the same for both options.

(a)

(a1) Determine the total safety stock requirement for Option 1 (with 9 warehouses) and Option 2 (with 1 warehouse) if a 99.38%service level is required.

(a2) Justify the use of Option 1 with THREE reasons from a logistics managers viewpoint.