Fixed quantity-each warehouse will serve one coast

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Reference no: EM131700840

Crew Soccer Shoes Company is reconsidering its current inventory control system and distribution strategy for soccer shoes. The information regarding the shoes is as follows:

Annual Demand = 1000 pairs/year

Lead time = 1 weeks

Order cost = $35/order

Holding cost = $2.00/pair/year

Service Level = 95%

Standard deviation of annual demand = 1000

Number of weeks/year = 50

If Crew currently has one warehouse and serves both the East and West Coast demand (which are equal and they assume normally distributed and independent), what will happen to demand, total inventory and safety stock if they open a second warehouse (which serves half the country)? Answer in paragraph form, then with math calculations.

Assume they use a fixed quantity Q, R system and each warehouse will serve one Coast.

Reference no: EM131700840

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