Benetton is considering pooling its thread inventory by knitting sweaters then dyeing The current process orders

Question

Benetton is considering pooling its thread inventory by knitting sweaters, then dyeing. The current process orders

already dyed thread in 4 colors, then knits 4 colors of sweaters. They use the continuous review (Q,R) system to determine inventory levels. Demand for the year for each color sweater is forecasted to be normally distributed and independent from the other colors with a mean of 1500 and a standard deviation of 500. Leadtime is 1 month and the service level is 85%.

  • What is the total inventory (using R) for all four sweaters?

BENETTON POOLING OF THREAD INVENTORY
October 16, 2016
Question:
Benetton is considering pooling its thread inventory by knitting sweaters, then
dyeing. The current process orders already dyed…
Operations Management