88%(17)15 out of 17 people found this document helpful
This preview shows page 1 - 3 out of 3 pages.
Cost of inventory (holding, obsolescence)oFeasibility of universal optionoSupply sources of localization materialsoEngineering requirement of localizationoValue of risk pooling
Short term: rationalize safety stockoInventory control system used: periodic review. Order-up-to systemoKey drivers of safety stock:Service targetVariability: standard deviation of demandLead timeReview periodLong term alternatives:oAlternativesAir shipmentEuropean factoryUniversal modelProduct line restructuringImprove forecast methodShorten review periodMore inventoryoDrivers affectedReduce lead timeReduce varianceReduce review periodIncrease serviceEvaluate the alternatives:oAlternativesAir shipmentEuropean factoryUniversal modelProduct line restructuringImprove forecast methodShorten review periodMore inventoryoEffectivenessVery expensiveVolume not high enoughExcessive costCannot affordLose transport economiesDeeper in the hole6. More cost-benefits of DC-Localization:Stock of localization materials higher at DCsLower value of transit inventoryPotential freight reduction
You've reached the end of your free preview.
Want to read all 3 pages?
product line restructuring, supply chain characteristics