How many fewer brake systems will need to be carried

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Reference no: EM133251322

Case: A car manufacturer makes 2 models (Model A and Model B).  They currently have a unique brake system for each model and carry safety stock for each model's brake system.  They are considering using a common brake system for both models.  The plant wants to maintain a service level of 99% (see attached Standard Normal Table).  Delivery lead time for the brake systems is six (6) days (regardless of whether they are unique or common).  Daily demand information is:

Car Model

Mean Daily Demand

Standard Deviation of Demand

Model A 800 100
Model B 1,800 200

Question: How many fewer brake systems will need to be carried in total Safety Stock if the manufacturer switches to a common component strategy (use the same brake system for both models) from the differentiated strategy (unique brake system for each model)?  Round all safety stock numbers UP to next whole number.

Reference no: EM133251322

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