1. Weekly demand for electric motors at a motor manufacturer is normally distributed, with a mean of 1,000 and a standard deviation of 1,000. Motors are currently delivered at a cost of $20,000 per motor. The supplier takes eight weeks to supply an order. A local manufacturer has offered to deliver motors with a lead time of one week at a cost of $20,400 per motor. The motor manufacturer is targeting a CSL of 99 percent and monitors its inventory continuously. The manufacturer incurs an annual holding cost of 25 percent. Should the manufacturer accept the local supplier's offer?

2. Weekly demand for private label washing machines at a department store chain, is normally distributed with a mean of 500 and a standard deviation of 300. The store chain currently has a supply source in China that delivers machines at a cost of 200 euro. The lead time required by the supplier is normally distributed with a mean of nine weeks and a standard deviation of six weeks. A European supplier has offered to deliver washing machines with a guaranteed lead time of one week at a cost of 210 euro. The store chain has anannual holding cost of 25 percent and targets a cycle servicelevel of 99 percent. Should the store chain accept the local supplier's offer?