Excercise 12-15: Epson

Epson produces printers for sale in Europe in its Taiwan factory. Printers sold in different countries differ in
terms of the power outlet as well as the language manuals. Currently Epson assembles and packs printers
Inputs
for sale in individual countries. The distribution of weekly demand in different countries is normally
distributed with mean and standard deviation as shown in Table 8.9. Assume demand in different countries
to be independent.
Weekly demand Given
forthat the lead
Epson time fromin
printers theEurope
Taiwan factory is eight weeks, how much safety
inventory does Epson require in Europe if it targets a cycle service level of 95 percent?
Epson decides Country
to build a central distribution Mean Demand
center (DC) in Europe. It will shipStandard
base printersDeviation
(without power
supply) to the DC. When an order is received, the DC
France will assemble power supplies, add
3,000 manuals, and ship
2,000
the printers to the appropriate country. The base printers are still to be manufactured in Taiwan with a lead
Germany
time of eight weeks. How much saving of safety inventory4,000 can Epson expect as a result? 2,200
Spain 2,000 1,400
Italy 2,500 1,600
Portugal 1,000 800
UK 4,000 2,400

Lead time (weeks) 8

Target cycle service level 0.95

Demand and Standard Deviation for Epson printers in Europe during Replenishment Lead Time
Mean demand during lead SD of demand during lead
Country time DL = time σL =
France ? ?
Germany ? ?
Spain ? ?
Italy ? ?
Portugal ? ?
UK ? ?
Aggregated ? ?

Output
Required Safety Inventory for Epson printers in Europe
Country Safety Inventory ss
France ?
Germany ?
Spain ?
Italy ?
Portugal ?
UK ?
Total ?

Aggregate at DC ?
Savings ?

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