Two markets in centralized distribution system

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Reference no: EM132154352

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

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

ii) What is the optimal safety stock the company should have in it's warehouse?

Reference no: EM132154352

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