Supply_Chain_9.ppt

Supply Chain Management--Suqian Zha Inventory Policy Decisions Inventory Policy Decisions Supply Chain Management--Suqian Zha * Supply Chain Management--Suqian Zha * Inventory policy decisions (1) Supply Chain Management--Suqian Zha * * Inventory Objectives Product Availability A primary objective of inventory management is to ensure that product is available at the time and in the quantities desired. This is commonly judged based on the probability of fulfillment capability from current stock. Supply Chain Management--Suqian Zha * * This probability or item fill rate, is referred to as the service level, and for a single item, can be defined as: Service Level= 1- (expected number of units out of stock/ total annual demand) Supply Chain Management--Suqian Zha * * However, customers frequently request more than one item at a time. Therefore, the probability of filling the customer order completely can be of greater concern than single- item service levels. A number of orders from many customers will show that a mixture of items can appear on any one order. The service level is then more properly expressed as a weighted average fill rate.(WAFR) Supply Chain Management--Suqian Zha * * A specialty chemical company receives orders for one of its paint products.The paint product line contains three separate items that customers order in various combinations. From a sampling of orders over time, the items appear on orders in seven different combinations with frequencies as noted in table 9-1 Also from the company’s historical records, the probability of having each item in stock is SLA=0.95, SLB=0.90, SLC=0.80, what is the WAFR? Supply Chain Management--Suqian Zha * * Computation of the weighted averge fill rate Item combination on order Frequency Probability of filling order completely Marginal value A 0.1 0.95 B 0.1 0.90 C 0.2 0.80 A,B 0.2 A,C 0.1 B,C 0.1 A,B,C 0.2 Supply Chain Management--Suqian Zha * * 某消费者到杂货店买六种产品，该店所存储的现货供应比例如下： 产品 现货供应比率 牙膏 95% 漱口水 93% 电池 87% 剃须