Problem C. A mail-order firm has four regional warehouses. Demand at each warehouse is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000. Holding cost is 25%, and each unit of product costs the company $10. Each order incurs an ordering cost of $1,000 (primarily from fixed transportation costs), and lead time is 1 week. The company wants the service level to be 95 %. Assume 50 working weeks in a year. a. Assuming that each warehouse operates independently, what should be the ordering policy at each warehouse? How much safety stock does each warehouse hold? How much average inventory is held (at all four warehouses combined), and at what annual cost? b. Assume that the firm has centralized all inventories in a single warehouse and that the service level still needs to be 95%. What is the new policy? That is, calculate the ordering quantity for the single warehouse and calculate new reorder point. How much average inventory can the company now expect to hOId, and at what cost? Hints: Calculate Q first. Q may be different in cases a and b