Mba 6205 Assignment 1
Maria Obando-Melo
Dr.Adams
MBA 6205
Assignment 1: Answer questions 7, 8, and 9 from Chapter 1 pages 17-18, and questions 2, 3, 4, 5, and 6 from Chapter 2 page 60.
Chapter 1
7-Consider a firm redesigning its logistics network. What are the advantages to having a small number of centrally located warehouses? What are the advantages to having a larger number of warehouses closer to the end customer?
In redesigning a firm’s logistics network, there are several key outcomes to be considered and compared. It is crucial to outweigh the impact that the location of warehouses play in the supply chain. Some advantages to having a small number of centrally located warehouses is that inventory is consolidated adding ease to the inventory management …show more content…
Short distances permit frequent distribution of inventory. Having inventory spread out among multiple warehouses would however make forecasting an even more challenging task.
8-Consider a firm selecting a supplier of transportation services? What are the advantages to using a truckload carrier?
Choosing the right transportation method speeds up the supply chain not only by making it more effective, but it also allows for easier estimation of delivery times. Contracting a strategic partnership with a truckload carrier is typically the timeliest/most effective method available. It increases reliability by ensuring the safety of goods being transported for these are not handled enroute nor are they mixed with other customer’s/company’s freight.
9-What are the advantages to a firm of high inventory levels? What are the disadvantages? What are the advantages of low inventory levels? The …show more content…
It can be established by the downstream customer, or the facility may have the flexibility to choose the appropriate level of service by comparing the tradeoffs explained above in question. Another strategy is to “focus on maximizing expected profit across all, or some, of their products” (page 47). Service levels will be higher for products with high profit margin, high volume, low variability and short lead time.
6-Consider the (Q,R) policy analyzed in Section 2.2.6. Explain why the expected level of inventory before receiving the order is Z x STD x √L. While the expected level of inventory immediately after receiving the order is Q + z x STD x √L
R consist of 2 components, average inventory during lead time and safety stock. The first component ensures that when an order is placed, the system has enough inventory to meet the demand (L x AVG). The second component, z x STD x L, protects against deviations from the expected demand during lead time, “z” being considered the “safety factor”. Right prior to the arrival of an order, the first component is expected to be exhausted (z * STD *√L), and when an order arrives, the expected inventory level is Q + z * STD *√L (page 42,43).
References:
Simchi-Levi, Designing and Managing the Supply
Dr.Adams
MBA 6205
Assignment 1: Answer questions 7, 8, and 9 from Chapter 1 pages 17-18, and questions 2, 3, 4, 5, and 6 from Chapter 2 page 60.
Chapter 1
7-Consider a firm redesigning its logistics network. What are the advantages to having a small number of centrally located warehouses? What are the advantages to having a larger number of warehouses closer to the end customer?
In redesigning a firm’s logistics network, there are several key outcomes to be considered and compared. It is crucial to outweigh the impact that the location of warehouses play in the supply chain. Some advantages to having a small number of centrally located warehouses is that inventory is consolidated adding ease to the inventory management …show more content…
Short distances permit frequent distribution of inventory. Having inventory spread out among multiple warehouses would however make forecasting an even more challenging task.
8-Consider a firm selecting a supplier of transportation services? What are the advantages to using a truckload carrier?
Choosing the right transportation method speeds up the supply chain not only by making it more effective, but it also allows for easier estimation of delivery times. Contracting a strategic partnership with a truckload carrier is typically the timeliest/most effective method available. It increases reliability by ensuring the safety of goods being transported for these are not handled enroute nor are they mixed with other customer’s/company’s freight.
9-What are the advantages to a firm of high inventory levels? What are the disadvantages? What are the advantages of low inventory levels? The …show more content…
It can be established by the downstream customer, or the facility may have the flexibility to choose the appropriate level of service by comparing the tradeoffs explained above in question. Another strategy is to “focus on maximizing expected profit across all, or some, of their products” (page 47). Service levels will be higher for products with high profit margin, high volume, low variability and short lead time.
6-Consider the (Q,R) policy analyzed in Section 2.2.6. Explain why the expected level of inventory before receiving the order is Z x STD x √L. While the expected level of inventory immediately after receiving the order is Q + z x STD x √L
R consist of 2 components, average inventory during lead time and safety stock. The first component ensures that when an order is placed, the system has enough inventory to meet the demand (L x AVG). The second component, z x STD x L, protects against deviations from the expected demand during lead time, “z” being considered the “safety factor”. Right prior to the arrival of an order, the first component is expected to be exhausted (z * STD *√L), and when an order arrives, the expected inventory level is Q + z * STD *√L (page 42,43).
References:
Simchi-Levi, Designing and Managing the Supply