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I'm stuck on this one.... I can't figure out the echelon portion of this and what formulas to use. Suppose a new, centralized warehouse is

I'm stuck on this one.... I can't figure out the echelon portion of this and what formulas to use.

Suppose a new, centralized warehouse is added to serve Atlanta, Boston, Chicago, and Dallas as shown in Figure 1c. The manufacturing facility will continue to serve the Los Angles warehouse given its proximity and newly added centralized warehouse. Assuming that all warehouses are following the continuous review inventory policy, compute and describe its inventory management policy and associated cost. Keep in mind that the centralized warehouse is one echelon above regional warehouses. Ignore inbound and outbound transportation cost. Provide answers and calculations for order quantity, demand during lead time, safety stock, average inventory level, inventory holding cost per week, ordering cost per week, and total cost per week.

Q*

Ddlt

SS

Avg Inv

Inv cost

Ord Cost

Tot Cost

Atlanta

Boston

Chicago

Dallas

LA

Central Warehouse

Total cost of the distribution system 1c

Total cost of the distribution system 1a

Total cost of the distribution system 1b

Information:

90% servie rate / z=1.29

order cost holding cost/unit
mixed model central warehouse $ 3,000.00 $ 1.00
fegional wareshoue $ 3,000.00 $ 1.25

HISTORICAL demand for 12 weeks
Week 1 2 3 4 5 6 7 8 9 10 11 12
Atlanta 33 45 37 38 55 30 18 58 47 37 23 55
Boston 26 35 41 40 46 48 55 18 62 44 30 45
Chicago 44 34 22 55 48 72 62 28 27 95 35 45
Dallas 27 42 35 40 51 64 70 65 55 43 38 47
Los Angels 32 43 54 40 46 74 40 35 45 38 48 56

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