Epson produces printers for sale in Europe in its Taiwan factory. Printers sold in different countries differ in terms of the power supply unit as well as the language of the user manuals. Currently, Epson assembles and packs printers for sale in individual countries. The distribution of weekly demand in different countries is normally distributed and independent.

Country Mean Demand Standard Deviation of Demand France 3,600 2,400 Germany 4,000 2,500 Spain 2,000 1,500 Italy 2,400 1,800 Portugal 1,000 800 UK 4,000 2,000

a. Given that the lead time from the Taiwan factory is 9 weeks, how much safety inventory does Epson require across Europe if it targets a CSL of 99%? b. Epson is considering the supply chain strategy of Postponement ("delayed differentiation"). They will ship a generic ("vanilla box") printer without the power supply unit or a language-specific user manual to a central DC located in Ansbach, Germany. When an order is received from any country, the DC will install the appropriate power supply unit, pack the correct user manual, and ship the printers. The generic printers will still be manufactured in Taiwan with the same lead time of 9 weeks. How much saving in safety inventory (# of printers) can Epson expect as a result of the postponement strategy? c. Suppose each printer costs Epson 300. The holding cost rate is 40% per year. If final assembly in the European DC adds 6 to the production cost of each printer would you recommend the postponement strategy? [Assume 50 weeks in the year.]