SD Computers Mean SD 1,000 700 800 500 700 600 Target Best Buy Office Max Staples Printers Mean 2,000 1,500 1,200 906 SD 1,000 800 600 500 Scanners Mean 4,000 4,500 2,000 1,400 1,000 900 600 700 400 500 Question 1: Current System The current system has packaging and labeling done in Malaysia before the product is shipped to the Distribution Center (DC) in St. Louis. In this case, all safety inventory has to be held in labeled and packed form and cannot be shared across customers. What is the total safety inventory of the current system? Question 2: Postponement System If labeling and packaging is postponed to the St. Louis DC, all safety inventory of a product can be held in aggregate form to be used for any customer. What is the total safety inventory of the postponement system, assuming that the correlation coefficient of demand between any pair of customers is zero (.e., demand is independent) For Question 2, when the correlation coefficient of demand between any pair of customers is zero, please use the following formula to calculate the mean and standard deviation of the weekly aggregate demand of k customers: Mean weekly demand at customer i (Target, Best Buy, etc.) Standard deviation of weekly demand at customer i D , D, Mean aggregate weekly demand of k customers D o o 6 Standard deviation of aggregate demand of k customers Question 3: If we only consider safety inventory in two systems, which inventory system do you recommend? SD Computers Mean SD 1,000 700 800 500 700 600 Target Best Buy Office Max Staples Printers Mean 2,000 1,500 1,200 906 SD 1,000 800 600 500 Scanners Mean 4,000 4,500 2,000 1,400 1,000 900 600 700 400 500 Question 1: Current System The current system has packaging and labeling done in Malaysia before the product is shipped to the Distribution Center (DC) in St. Louis. In this case, all safety inventory has to be held in labeled and packed form and cannot be shared across customers. What is the total safety inventory of the current system? Question 2: Postponement System If labeling and packaging is postponed to the St. Louis DC, all safety inventory of a product can be held in aggregate form to be used for any customer. What is the total safety inventory of the postponement system, assuming that the correlation coefficient of demand between any pair of customers is zero (.e., demand is independent) For Question 2, when the correlation coefficient of demand between any pair of customers is zero, please use the following formula to calculate the mean and standard deviation of the weekly aggregate demand of k customers: Mean weekly demand at customer i (Target, Best Buy, etc.) Standard deviation of weekly demand at customer i D , D, Mean aggregate weekly demand of k customers D o o 6 Standard deviation of aggregate demand of k customers Question 3: If we only consider safety inventory in two systems, which inventory system do you recommend