Aquaguard manufactures three models of water purifiers in three separate plants at Taiwan. These plants serve the demand in Europe. All three models sell at a unit price of $100 and the holding cost is 5% of the selling price per month. The monthly demand for these models is normally distributed with the following parameters: Model 1: Mean 1000, SD 300 Model 2: Mean 1000, SD 300 Model 3: Mean 1000, SD 300 The demand for Model 1 and Model 2 has a correlation coefficient of -0.4, while that for Model 3 is independent of the other two models. Consider Aquaguard's distribution in Europe. They have a central DC that caters to the European market. The lead time from Taiwan to their DC is 3 months and orders are placed every month. Determine the expected end-of-month inventory for each product when a target in-stock probability is 95%. Aquaguard has the option of redesigning its products. It can develop a "base" product B and ship it to the DC. The base product can then be customized into any one of the Models and sold (delayed differentiation). The company chooses to redesign Models 1 and Models 2 while Model 3 remains untouched. The lead time, the in-stock target level and the ordering policies remain the same. Determine the expected end-of-period inventory for product B. Aquaguard manufactures three models of water purifiers in three separate plants at Taiwan. These plants serve the demand in Europe. All three models sell at a unit price of $100 and the holding cost is 5% of the selling price per month. The monthly demand for these models is normally distributed with the following parameters: Model 1: Mean 1000, SD 300 Model 2: Mean 1000, SD 300 Model 3: Mean 1000, SD 300 The demand for Model 1 and Model 2 has a correlation coefficient of -0.4, while that for Model 3 is independent of the other two models. Consider Aquaguard's distribution in Europe. They have a central DC that caters to the European market. The lead time from Taiwan to their DC is 3 months and orders are placed every month. Determine the expected end-of-month inventory for each product when a target in-stock probability is 95%. Aquaguard has the option of redesigning its products. It can develop a "base" product B and ship it to the DC. The base product can then be customized into any one of the Models and sold (delayed differentiation). The company chooses to redesign Models 1 and Models 2 while Model 3 remains untouched. The lead time, the in-stock target level and the ordering policies remain the same. Determine the expected end-of-period inventory for product B
