1. Assuming a service level of 99% for all parts, what will be the impact on the total inventory investment if the number of warehouses is reduced from 8 warehouses to 2? Reduced to 1? Assume that each of the 8 warehouse has roughly equal demand and, when consolidating the warehouses, the total demand across all 8 warehouses is equally divided between the remaining warehouses.

a.Using data from the case and Exhibit 3, complete the table below. Note that Exhibit 3 of the case gives the standard deviation of the bi-weekly demand per warehouse for 8-, 2-, and 1-warehouse cases respectively. Use these values to calculate the Stdev of weekly demand.

Note: In the table below, you will first calculate the inventory parameters for 1 warehouse when the company has an 8-warehouse system, a 2-warehouse system, and a 1-warehouse system respectively. You will then multiply by the corresponding number of warehouses to get the total inventory for each of the three cases.

- Grifn Beaker Erlenmeyer Flask # of Warehouses POU (weeks) Calculations Average Pipeline for 1 Inventory warehouse Begin on hand - Average Inventory for 1 Warehouse Total Average Inventory (all warehouses)