Next six questions are based on the following information: A grocery chain has 25 stores in southeast US. Each store faces similar demand for baby diaper. Each store is using a periodical review model to manage its inventory. The desired service level is 96% (corresponding z-1.75). The mean and the standard deviation of weekly demand are 50 and 20 boxes, is 8 weeks. See the illustration below for the firm's operation. respectively. Each store orders weekly and holds its own inventory. The lead time Store 1 A I Supplier Store 25 og n 8 weeks lead time 1 week review cycle What is the safety stock that each store holds? 9. 10. What is the total safety stock the chain holds? Recently, the top management of the chain decides to add a Regional Distribution Center. The RDC will order from the supplier for baby diaper and then supply each store. Both RDC and the stores use periodical review model to manage their inventory and they order once every week. The lead time from supplier to RDC is 7 weeks and the lead time from RDC to stores is one week. The desired service level is 96% at both RDC and the store. The standard deviation of weekly demand at each store is still 20 boxes. See the illustration below for the new operation. Store Supplier RDC 7 weeks lead time 1 week review cycle Store 25 1 week lead time 1 week review cycle 11. What is the safety stock that each store holds? 12. What is the safety stock the RDC holds? 13. What is the total safety stock the chain holds? 14. After adding the RDC, the chain decides to use Q model to manage its inventory at RDC. The ordering cost is $100 and the annual holding cost of each box of diaper is $2. Assume the store opens 52 weeks a year. The lead time from supplier to RDC is still 7 weeks. The desired service level is still 96% at RDC. The mean and the standard deviation of weekly demand at each store are still 50 and 20 boxes, respectively. What is the optimal order quantity of the chain? What is the ROP