Weekly demand for private label washing machines at Karstadt, a German department store chain, is normally distributed with a mean of 500 and a standard deviation of 300. Karstadt currently has a supply source in China that delivers machines at a cost of 200 euro. The lead time required by the supplier is normally distributed with a mean of nine weeks and a standard deviation of six weeks. A European supplier has offered to deliver washing machines with a guaranteed lead time of one week at a cost of 210 euro. Karstadt has a holding cost of 25 percent and targets a cycle service level of 99 percent. Should Karstadt accept the local suppliers offer?

Please complete in the excel format provided below.

Exercise 12-11: Inputs Average demand per unit time, D= Lead time from Chinese supplier, L= SD of demand per unit time, D= SD of lead time for Chinese supplier, sL Holding cost, h= Target cycle service level Distribution of Demand during Lead Time Mean demand during lead time, DL= SD of demand during lead time, L= Safety Inventory and Costs with Chinese Supplier Safety inventory, 55= Reorder point, ROP= Cost per machine Annual holding cost Annual cost of machine Total annual cost with Chinese supplier Safety Inventory and Cost with Local Supplier Lead time of local supplier Cost per machine from local supplier Required safety inventory Annual holding cost Annual cost of machine from local supplier Annual cost with local supplier Savings from using local supplier Exercise 12-11: Inputs Average demand per unit time, D= Lead time from Chinese supplier, L= SD of demand per unit time, D= SD of lead time for Chinese supplier, sL Holding cost, h= Target cycle service level Distribution of Demand during Lead Time Mean demand during lead time, DL= SD of demand during lead time, L= Safety Inventory and Costs with Chinese Supplier Safety inventory, 55= Reorder point, ROP= Cost per machine Annual holding cost Annual cost of machine Total annual cost with Chinese supplier Safety Inventory and Cost with Local Supplier Lead time of local supplier Cost per machine from local supplier Required safety inventory Annual holding cost Annual cost of machine from local supplier Annual cost with local supplier Savings from using local supplier