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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.

(a3) The hospital has decided to adopt Option 1. In the NT West region, there are five hospitals, and each has different weekly demand of face masks. The location of hospitals and their average weekly demand of face masks are shown below:

		Location
Hospital	Demand (units)	X-coordinate	Y-coordinate
Castle Peak Hospital	3,000	20	110
Pok Oi Hospital	7,000	30	120
Siu Lam Hospital	4,000	40	80
Tin Shui Wai Hospital	6,000	60	100
Tuen Mun Hospital	10,000	50	100

Determine the potential warehouse location with X and Y coordinates using center of gravity method. From a logistics managers point of view, discuss THREE factors that the hospital should consider before adoption of the location solution determined by the center of gravity method.