3 Best Technology (BT) is a leading manufacturer of adhesives used in a variety of industrial applications. BT produces two types of industrial adhesives in its Texas plant for the US market. The two types of adhesives are produced using the same production technology and equipment. They have identical characteristics except their adhesive strengths which are determined by the last production step of mixing with different chemicals. The demands for the two types of adhesives are independent and their weekly demands in the US distribution centre (DC) are approximately normally distributed with their means and standard deviations given below. Adhesives Type I Adhesive Type II Adhesive Mean (kg) 10,000 4,000 Standard Deviation (kg) 9,000 3,000 The replenishment lead time of the adhesives from BT's manufacturing plant to the US DC is 4 weeks. The current adhesive production cost is $100/kg, the cost of shipping the adhesive from the plant to the DC is $20,000, and the annual holding cost rate is 50%. BT has decided to use a (Q,R) level policy to control the inventory at the DC to achieve its target service of less than 5% stock-out probability. (a) Increasing competition has led to a dramatic increase in the number of new products, models and options launched in both consumer and industrial markets. Why does the increase make supply chains more difficult to manage? (5 marks) (b) Determine the amount of safety stock and the annual inventory cost of the two types of adhesives kept in the DC. (7 marks)