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HalaToys is expanding their network of stores to cover more cities and meet the ever- growing demand for toys. They plan to open three new stores where it was predicted that their monthly demand is 400 items for the store in Jahra, 520 items for the one in Dasma, and 630 items for the third store in Salmiya. The average cost of toys is 14 KWD/unit, and the holding cost at the three stores is estimated to be around 20% of the unit cost. Toys are delivered to each store using a truck that charges 80 KWD per trip and an additional 20 KWD per store.
a) The original plan calls for separate trucks for every store. Accordingly, determine the optimal order quantity of every store, as well as the total annual Holding and Setup costs for all stores
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Order Paper Nowb) Assist HalaToys in determining if it is more economical to aggregate orders and use one truck for the three stores. Determine the optimal order quantities and total costs that result from the aggregation and comment if HalaToys should order independently or jointly.
c) The weekly demand at Jahra store has a standard deviation of 12 units/week, and the supplier takes two weeks to deliver the orders. Assuming a Reorder Point (RoP) of 250 units, determine the CSL that results from this Rop. What is the safety stock level and the average inventory associated with this CSL?
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