Business, 30.03.2021 21:40 Legrand4423

Weekly demand for private label washing machines at Home Depot is normally distributed with a mean of 187 and a standard deviation of 35. Home Depot currently has a supply source in China that delivers machines at a cost of $400, and the shipping charge is $5000 each time. The lead time from this supplier is normally distributed with a mean of 5 weeks and a standard deviation of 2 weeks. A US local supplier has offered to deliver washing machines with a guaranteed lead time of one week at a cost of $220, and the shipping charge is $1000 each time. Home Depot has a holding cost of 25% and targets a cycle service level of 99%. Required:
Should Home Depot accept the local supplier's offer?

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