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 Assume that demand in countries to be independent. Given that the lead time from the Turkey factory is (X/4) weeks, how much safety inventory does the company require in Asia if it targets a CSL level of 95 percent?X= 96 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? X=96 Country а. Azerbaijan | Kazakhstan | Uzbekistan | Kyrgyzstan | Turkmenistan | Tajikistan 2,500 1,600 3,000 2,000 4,000 2,200 2,000 1,400 Mean Demand 150*X 4,000 2,400 Standard Deviation 100*X
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
![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
Assume that demand in countries to be independent. Given that the lead time from the Turkey factory is
(X/4) weeks, how much safety inventory does the company require in Asia if it targets a CSL level of 95
percent?X= 96
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? X=96
Country
а.
Azerbaijan | Kazakhstan
3,000
2,000
4,000
2,200
Uzbekistan Kyrgyzstan| Turkmenistan Tajikistan
2,000
1,400
2,500
1,600
Mean Demand
150*X
4,000
2,400
Standard Deviation
100*X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5810a740-3302-432b-9b23-2545665beb0a%2Fd05d3340-d547-4506-b5cf-82aa7b9c255f%2Fgjjef8b_processed.png&w=3840&q=75)
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