Business, 19.01.2022 03:30 beaaaaast3

Weekly demand for electric motors at a Japanese motor manufacturer is normally distributed, with a mean of 1,000 and a standard deviation of 1,000. Motors are currently assembled in China and delivered at a cost of 20,000 yen/motor. The supplier takes eight weeks to supply an order. A local Japanese manufacturer has offered to deliver motors with a lead time of one week at a cost of 20,400 yen per motor. The motor manufacturer is targeting a CSL of 99 percent and monitors its inventory continuously. The manufacturer incurs a holding cost of 25 percent. Should the manufacturer accept the local supplier’s offer?

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