A company manufactures products in its factory in Turkey for sale in Asia. Products sold in different countries differ in terms of the power outlet as well as the language of the manuals. Currently, the company assembles and packs products for sale in individual countries. The distribution of weekly demand in different countries is normally distributed with means and standard deviations as shown in the table. a.Assume that demand in countries to be independent. Given that the lead time from the Turkey factory is 24 weeks, how much safety inventory does the company require in Asia if it targets a CSL level of 95 percent? b.The company builds a distribution center in Asia. It will ship base products to this center. When an order is received, the center will assemble power supplies, add manuals, and ship the products to the appropriate country. The base products are still to be manufactured in Turkey with the same lead time. How much saving of safety inventory can the company expect as a result of this aggregation? Mean Demands Azerbaijan: 3000 Kazakhstan: 4000 Uzbekistan: 2000 Kyrgyzstan: 2500 Turkmenistan:14400 Tajikistan: 4000 Standard Deviations Azerbaijan: 2000 Kazakhstan: 2200 Uzbekistan: 1400 Kyrgyzstan: 1600 Turkmenistan: 9,600 Tajikistan: 2,400
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
A company manufactures products in its factory in Turkey for sale in Asia. Products sold in different countries differ in terms of the power outlet as well as the language of the manuals. Currently, the company assembles and packs products for sale in individual countries. The distribution of weekly demand in different countries is
a.Assume that demand in countries to be independent. Given that the lead time from the Turkey factory is 24 weeks, how much safety inventory does the company require in Asia if it targets a CSL level of 95 percent?
b.The company builds a distribution center in Asia. It will ship base products to this center. When an order is received, the center will assemble power supplies, add manuals, and ship the products to the appropriate country. The base products are still to be manufactured in Turkey with the same lead time. How much saving of safety inventory can the company expect as a result of this aggregation?
Mean Demands
Azerbaijan: 3000
Kazakhstan: 4000
Uzbekistan: 2000
Kyrgyzstan: 2500
Turkmenistan:14400
Tajikistan: 4000
Standard Deviations
Azerbaijan: 2000
Kazakhstan: 2200
Uzbekistan: 1400
Kyrgyzstan: 1600
Turkmenistan: 9,600
Tajikistan: 2,400
Step by step
Solved in 2 steps
