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One of the 10 variants represents the majority of total demand. Weekly demand for this variant is normally distributed, with a mean of 1,000 and
One of the 10 variants represents the majority of total demand.Weekly demandfor this variant is normally distributed, with a mean of 1,000 and a standard deviation of 200.
- Eachof the remaining 9 variants has a weekly demand of 28 and a standard deviation of 20.
- Orion uses a reorder point policy and aims to provide a service level of 95%.
- Replenishment lead-time is4 weeks.
- Assume 50 weeks in a year.
- How much safety stock of each variant (the major variant, and each of the other 9 variants) must Orion keep? What is the Reorder Point for each variant?
- If Orion decides to sell a universal design copier (i.e., only one variant), how much safety stock must Orion keep to achieve the same service level?
- If Orion decides to keep the major variant (high-demand variant) and sell a universal design copier for the other 9 low-demand variants, how much safety stock should be used in total to achieve the same service level?
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