Question: Please use the data at the bottom to answer the following question. 1. Suppose a new, centralized warehouse is added to serve Atlanta, Boston, Chicago,

Please use the data at the bottom to answer the following question.

1. Suppose a new, centralized warehouse is added to serve Atlanta, Boston, Chicago, and Dallas as shown in Figure 1c. The manufacturing facility will continue to serve the Los Angles warehouse given its proximity and newly added centralized warehouse. Assuming that all warehouses are following the continuous review inventory policy, compute and describe its inventory management policy and associated cost. Keep in mind that the centralized warehouse is one echelon above regional warehouses. Ignore inbound and outbound transportation cost. Provide answers and calculations for order quantity, demand during lead time, safety stock, average inventory level, inventory holding cost per week, ordering cost per week, and total cost per week. Compare ordering, holding, and total cost of this distribution system with your answers to questions 1 and 2. Which distribution system has the lowest cost out of all three described? Comment on your findings.

Mix Model Distribution Strategy (1c) <>

Mix Model Distribution Strategy (1c) <>

Order Quantity

Ddlt (Demand

during lead time)

 Safety Stock Avg Inv Inv cost Ord Cost Tot Cost
Atlanta
Boston
Chicago
Dallas
LA
Central Warehouse

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