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Question #4 Home Depot sells the LawnBoy T650 lawn mowers at 49 stores in the Pacific Northwest. Weekly demand for the T650 at each of the stores is...
Question #4Home Depot sells the LawnBoy T650 lawn mowers at 49 stores in the Pacific Northwest. Weekly demand for the T650 at each of the stores is identical and given by:X ~ Normal (50, 30)Assume that the demands at the 49 stores are independent of each other. The manufacturer’s lead time for supplying the mowers is 9 weeks. Home Depot has a stated policy of 90% cycle service level for mowers. a. How much safety stock is required at each store?b. The chain is considering centralizing the inventory of the T650 to a distribution center that will serve all 49 stores. How much safety stock would be required at the DC to provide the same cycle service level of 90%?c. If the cost of each mower is $400, and Home Depot uses a 30% holding cost rate, what is the annual savings for the chain in inventory holding costs as a result of the centralization?Question #5Epson produces printers for sale in Europe in its Taiwan factory. Printers sold in different countries differ in terms of the power outlet as well as the language of the manuals. Currently, Epson assembles and packs printers for sale in individual countries. The distribution of weekly demand in different countries is normally distributed, with means and standard deviations as shown below: CountryDemandMean Standard DeviationFrance 3,000 2,000Germany 4,000 2,200Spain 2,000 1,400Italy 2,500 1,600Portugal 1,000 800UK 4,000 2,400a. Assume demand in different countries to be independent. Given that the lead time from the Taiwan factory is eight weeks, how much safety inventory does Epson require in Europe if it targets a CSL of 95 percent?b. Epson decides to build a central DC in Europe. It will ship base printers (without power supply) to the DC. When an order is received, the DC will assemble power supplies, add manuals and ship the printers to the appropriate country. The base printers are still to be manufactured in Taiwan with a lead time of eight weeks. How much saving of safety inventory can Epson expect as a result?
