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A sports - car manufacturing company BTS currently has warehouse in three locations, i . e . , Austin, Seattle, and Boston. The variance of
A sportscar manufacturing company BTS currently has warehouse in three locations, ieAustin, Seattle, and Boston. The variance of weekly demands of all these cities and absolute value of the correlation coefficient among these cities are given in Table Also, it is known that demands of Austin and Seattle, and demands of Austin and Boston are positively correlated. In contrast, demands of Seattle and Boston are negatively correlated. The replenishment lead time for each of cities is weeks. Now, BTS is considering to build a centralized warehouse in Seattle to reduce safety stock requirement. The Company maintains a customer service level of Table Description of the data related to demands and correlation coefficientVariance of the weekly demand in weeksAustinVariance of the weekly demand in weeksSeattleVariance of the weekly demand in weeksBostonCorrelation between the demands of Austin and SeattleCorrelation between the demands of Austin and BostonCorrelation between the demands of Seattle and BostonBased on the information given above, answer the following questionsaWhat is the safety stock required for each of Austin, Seattle, and Boston? What is the totalsafety stock required for the decentralized option? bWhat is the standard deviation of the demand in case of centralized location in Seattle? Whatis the total safety stock required for the centralized option? cWhat is the reduction in the safety inventory if BTS moves from disaggregate to aggregateoption
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