Consider the inventory of a specific model of a big-screen TV at a single Best Buy store. The weekly demand for this item has an average of 5 units and a standard deviation of 1.5 units. Best Buy's order size is 20 units and it takes 2 weeks for the order to arrive at the store. Best Buy aims at maintaining a service level of 95%. What are the (a) cycle stock, (b) safety stock, and (c) pipeline stock?

(d) An improved ordering and delivery system helps reduce the lead time from 2 weeks to 1.5 weeks and allows Best Buy to order in smaller batch sizes such that its order size now is 10 units. Assuming nothing else changes, would you go for this new system, why?

Continuing from the previous question, the new system allows for direct fulfillment to customers. Therefore Best Buy decides to consolidate the inventory from all four of its Seattle-area stores into one fulfillment center and directly send units from there to customers. This leaves no stock at stores. Let us assume that demand and all other data is the same for all four stores and remains the same as in the previous question (LT to fulfillment center is the same as LT to each store 1.5 weeks). What is the safety stock at the fulfillment center? Please briefly explain why this is different from four times (to account for four stores) the safety stock you computed in the previous question.