Safety stock of electricity transformers

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Reference no: EM131649862

In an effort to reduce costs, many regional power companies want to lower their safety stock of electricity transformers. To support this desire, a large transformer OEM will store safety stock of transformers in a FedEx warehouse in Memphis, Tennessee in order to insure quick air delivery to any of these is power companies should the need arise. This collaboration will result in lower overall inventory across the supply chain, making it possible for all parties to lower their costs. The OEM has signed up 9 power companies on this rapid replenishment program. On average, each of these power companies used to hold 40 transformers in their safety stock. In total, how many transformers would these companies hold? (Display your answer as a whole number.) To maintain the same service level after this transition, how many units (transformers) would the OEM need to hold (or pool) in the FedEx warehouse? (Display your answer as a whole number.) After making this change for these power companies and OEM, by how many units (transformers) will inventory go down? (Display your answer as a whole number.) By what percentage would the total supply chain inventory decrease by consolidating power company inventory into the FedEx warehouse? (Write your answer as a percentage and display your answer as a whole number.

Reference no: EM131649862

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