EPSON produces printers for sale in northern Europe in its Taiwan factory. Printers sold in different countries differ in terms of the power outlets as well as the language for the manuals. Currently, ESPON assembles and packs printers for sale in individual countries. The distribution of weekly demand in different countries is normally distributed, with means and standard deviations as shown in the table below:

QUESTION: EPSON recently decided to build a central Distribution Center (DC) in northern Europe. It will now ship base printers (without power supply) to the DC. When an order is received, the DC will assemble power supplies, add manuals, and ship the printers to the appropriate country. The base printers are still to be manufactured in Taiwan with a lead time of 8 weeks. How much savings of safety inventory can ESPON expect as a result?

MY ANSWER:

Total standard deviation in lead time = total standard deviation * sqrt(L)

= (2000+2200+1400)*sqrt(7) =14816

Total safety inventory = total standard deviation in lead time * Z

= 14816* 1.645 =24372

New DC inventory =14816

Savings at new DC with CSL of 95% = 9556

IS THE ABOVE ANSWER CORRECT?

Country	Mean Weekly Demand	Standard Deviation
Belarus	3,000	2,000
Norway	4,000	2,200
Finland	2,000	1,400