Question
There are 6 independent regional markets, each with average weekly demand of 200 units and standard deviation of 40. The service level of each market
There are 6 independent regional markets, each with average weekly demand of 200 units and standard deviation of 40. The service level of each market is 95%. Please compare the total safety stock level for each of the following four systems: decentralized, centralized, cross-docking, and a multi-echelon system with an additional layer of central distribution center between the factory and the regional warehouses (please refer to the slides of Multi-echelon Inventory System for the four systems). The review period is 1 week at each facility. The lead time from the manufacture to the regional warehouses is 11 weeks for the decentralized and the centralized systems. The lead time from the manufacturer to the cross-docking site or the central distribution center is 8 weeks, and from them to the regional warehouses is 3 weeks. *Graduate students please also compare the total average inventory level.
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