To evaluate the two options, a team from both manufacturing and the DC was set up$.$ The team decided to focus its analysis on three major product categories$$computers$,$ printers, and scanners, and four major customers$$Target$,$ Best Buy, Staples, and Office Max. Weekly demand for each product and customer is shown below. In each case, $$Mean$$ indicates the average weekly demand, and $$SD$$ indicates the standard deviation of weekly demand. All demand was assumed to be normally distributed. PE incurred a total cost of $$1,000$ per computer, $$300$ per printer, and $$100$ per scanner. Given the short life cycle of these products, PE used an annual holding cost of $30$ percent when making its inventory decisions. It was assumed that batch sizes and cycle inventories would be unchanged irrespective of where packaging and labeling were done. Thus, the team analyzed the impact of postponement on safety inventories before making a final recommendation.

Target