MPC Assignment

Epson Case

Acad Group No. 5

Sabbyasachi Sarkar PGP-19-056
Ritesh Gupta PGP-19-128
Arnab Kumar Khanra PGP-19-173
Rahul Das PGP-19-206
Ram Kumar PGP-19-207
Rohit Chakraborty PGP-19-209
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Z value for 95% service level 1.644853626951
Cost/printer $ 200.00
Holding cost 25%
Assembly cost $ 5.00

Printers shipped from Taiwan to European countries

Country Mean Demand Standard deviation Lead time(Weeks)

France 3000 2000 8

Germany 4000 2200 8
Spain 2000 1400 8
Italy 2500 1600 8
Portugal 1000 800 8
UK 4000 2400 8
Total 16500

Total inventory holding costs $ 5,719,221.28

Printers shipped from Taiwan to central DC in Europe

Country Mean Demand Standard deviation Lead time(Weeks)

France 3000 2000 8

Germany 4000 2200 8
Spain 2000 1400 8
Italy 2500 1600 8
Portugal 1000 800 8
UK 4000 2400 8
Total demand 16500
Mean demand standard
deviation 4445.222154179

Total inventory holding cost $ 4,334,036.16

Assembly cost $ 763,403.62

Total savings of safety stock inventory 27703.7024618934

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Mode of distribution Holding cost
Printers shipped from taiwan to european countries 5719221.2796475
Printers shipped to countries through central european DC 4334036.1565528
Savings in holding cost due to European DC $ 1,385,185.12

Total cost of using the european DC $ 5,097,439.77

EPSON is recommended to open a central DC in Europe as this would reduce the holding cost as compared to dire
customise its offering through delayed differentiation

Printers shipped from Taiwan to European countries

Country Mean Demand Standard deviation Lead time(Weeks)

France 3000 2000 4

Germany 4000 2200 4
Spain 2000 1400 4
Italy 2500 1600 4
Portugal 1000 800 4
UK 4000 2400 4
Total 16500

Total inventory holding cost $ 3,360,647.77

Savings in holding cost without european DC $ 2,358,573.51

Printers shipped from Taiwan to central DC in Europe

Country Mean Demand Standard deviation Lead time(Weeks)

France 3000 2000 4

Germany 4000 2200 4
Spain 2000 1400 4
Italy 2500 1600 4
Portugal 1000 800 4
UK 4000 2400
Total demand 16500
Mean demand standard
deviation 4445.222154179

Inventory holding cost $ 2,381,173.98

Assembly cost $ 403,117.40
Total cost $ 2,784,291.38

Savings in holding cost with european DC $ 1,952,862.18

Lead time Lead time
Re order level Safety stock
consumption(mean) consumption(stdev)

24000 5656.85424949238 33304.697229 9304.697229

32000 6222.53967444162 42235.166952 10235.16695
16000 3959.79797464467 22513.288061 6513.288061
20000 4525.4833995939 27443.757784 7443.757784
8000 2262.74169979695 11721.878892 3721.878892
32000 6788.22509939086 43165.636675 11165.63668
132000 29415.6420973604 48384.42559

Lead time Lead time

Re-order level Safety stock
consumption(Mean) consumption(stdev)

132000 12572.9869164014 152680.72313 20680.72313

the holding cost as compared to direct shipments from the taiwan facility and will help EPSON

Lead time Lead time

consumption(mean) consumption(stdev) Re order level Safety stock

12000 4000 18579.414508 6579.414508

16000 4400 23237.355959 7237.355959
8000 2800 12605.590155 4605.590155
10000 3200 15263.531606 5263.531606
4000 1600 6631.7658031 2631.765803
16000 4800 23895.297409 7895.297409
66000 20800 34212.95544

Lead time Lead time

consumption(Mean) consumption(stdev) Re-order level Safety stock

66000 8890.44430835715 80623.479566 14623.47957