foe fey inven witout hung rue sali. 1 Novae the prs an conf he vais mens rat iat | Desrbethe voip ofodting poise and se pct GF fateh of tom tat on ey invoey TF Mu te inpct of uply doesn on saety nero? ing cana tem Depot wit afew larg sve prove a | ipeeteete podiet svalbity wt toner vente han J] Maaco ebte sok a Valu, ith many Sal | frercises |. Weskly demand for Motorola cell phones at a Best Buy store is normally distibuted, with a mean of 300 and a standard deviation of 200. Motorola takes two weeks to supply a Best Buy order. Best Buy is targeting a CSL of 95 percent and ‘monitors its inventory continuously. How much safety inven tory of cell phones should Best Buy carry? What should its ROP be? £2, Reconsider the Best Buy store in Bxercise 1. The store man: ager has decided to follow a periodic review policy fo manage Jnventory of cell phones. She plans to order every thiee swceks, Given a desired CSL. of 95 percent, how much safety Jnyentory should the store carry? What should its OUL be? ue thatthe Best Buy store in Exercise 1 has a policy of id for Motorola cell phones at the store is normally mally distributed, with a mean of 250 and a standard deviation of 150, The store manager continvously monitors inventory and currently orders 1,000 printers each time the Inventory drops to 600 printers. HP currently takes two weeks to fil an ner. How much safety inventory does the store carry? What CSL. does Sam's Club achieve as a result of this policy? What = fl ato does the store achive? 5 Return to the Sams Club store in Exerise 4, Assume that the = supply lead time ftom HP is wommally distributed, with ammean ‘of 2 weeks and a standaed deviation of 1.5 weeks. How much safety inventory should Sam's Club carry if it wants to pro- Vide a CSL, of 95 percent? How does the required safety = inventory change as the standard deviation of lead time is = teed from 1.5 weeks to zexo in intervals of 05 weeks? catty at the retail stores and which products to carey at a ental warehouse to e sold only via the online channel. Gap currently hes 900 retail stores in the United States. Weekly ‘Chapter 11 + Managing Uncertainty in Supply Chain: Safety Inventory 319 7. Why is Amazon.com able to provide a large variety of books and music with ess safety inventory than a bookstore chain selling through retail stores? 8. In the 1980s, paint was sold by eolor and size in paint stores, “Today, paint is mixed atthe paint store according to the color required. Diseuss what, if any, impact this change bus on safety Inventories in the supply chain 9. Anew technology allows books tobe printed inten minutes. Borders las decided to purchase these machines for each store, They must decide which books to carry in stock and ‘hich books to print on demand using this technotogy. Do you recommend it for best sellers oF for otter books? Why’? demand for size large Khaki pants at each store is normally distributed, with a mean of 800 and a standard deviation of 100, Each pair of pants costs $30. Weeldy demand for purple ‘cashmere sweaters at each store is normally distributed, with a rican of 50 anda standaed deviation of $0. Each sweater costs $100. Gap has a bolding cost of 25 percent. Gap manages all inventories using a continuous review'policy, and the supply lead time for both products is four weeks. The targeted CSL is 95 pexcent. How much reduetion in holding cost per unit sold can Gap expect on moving each ofthe two products from the stores to the online channel? Which of the two products should Gap carry at the stores, and which should it cary atthe central warehouse forthe online channel? Why? Assume ‘demand from one week to the next to be independent 17. Epson produces printers forsale in Europe in its Taiwan factory. Printers sol in diferent countries dfer in terms of the power ‘outlet as well as the Tanguage of the manuals. Currently, Epson asserables nd packs printers forsale in individual couse. ‘The distibution of weekly demand in differen counties normally distributed, with mesns and standaed deviations as ‘shown in Table 11-6, ‘Assume demand in different counties tobe independent Given that the lead time from the Taiwan factory is eight ‘weeks, how much safety inventory does Epson require fa rope if it targets CSE of 95 percent? Country Mean Demand _ Standard Deviation France 3,000 2,000 Germany 4,000 2,200 Spain 2,000 1,400 aly 2,500 1,600 Portugal 1,000 800 UK 4,000 2,400