Exercise 12-17: Epson
Inputs
Weekly Demand for Epson Printers in Europe
Country
Mean Demand
Standard
Deviation
France 3,000 2,000
Germany 4,000 2,200
Spain 2,000 1,400
Italy 2,500 1,600
Portugal 1,000 800
UK 4,000 2,400
Lead time 8
Target cycle service level 0.95
Printer Costs $200.00
Holding Costs 0.25
Correlation coefficient, ρ0.20
Demand and Standard Deviation for Epson Printers in Europe during Replenishment Lead Time
Country
Mean Demand
during Lead Time
DL =
SD of Demand
during Lead
Time σL =
France Germany Spain Italy Portugal UK
France 24,000 5,657 7,040,000 4,480,000 5,120,000 2,560,000 7,680,000
Germany 32,000 6,223 4,928,000 5,632,000 2,816,000 8,448,000
Spain 16,000 3,960 3,584,000 1,792,000 5,376,000
Italy 20,000 4,525 2,048,000 6,144,000
Portugal 8,000 2,263 3,072,000
UK 32,000 6,788
Aggregated 132,000 17,307
Required Safety Inventory for Epson Printers in Europe
Holding Costs $2,419,221 995876.297 4 6 8 10 12
Holding Cost Savings ($) $995,876 1 $0 $0 $0 $0 $0
(8 weeks)
Covariance