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Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centres in different regions of the country. For one of its products, a high-speed modem priced at $350 per unit, the average weekly demand at each distribution center is 75 units. Average shipment size to each distribution center is 400 units, and average lead time for delivery is 2 weeks. Each distribution center carries 2 weeks supply as safety stock but holds no anticipation inventory.
a.On average, how many dollars of pipeline inventory will be in transit to each distribution center?
b. How much total inventory (cycle, safety, and pipeline) does Prince Hold for all five distribution centres?
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