The two markets in centralized distribution system

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Reference no: EM132155079

1) A company serves two markets in North America and has decided to have only one warehouse for the distribution of its products to both markets. The demand in the first market is equal to 1, 3, or 5 units with equal probability, whereas the demand in the second market is equal to 4, or 6 units with equal probability. The company has a target level of product availability of CSL=90% on both markets.

What is the optimal quantity the company should order to serve the two markets in a centralized distribution system?

What is the optimal safety stock the company should have in its warehouse?

Reference no: EM132155079

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