Cost of inventory holding obsolescence o Feasibility of universal option o

Cost of inventory holding obsolescence o feasibility

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Cost of inventory (holding, obsolescence) o Feasibility of universal option o Supply sources of localization materials o Engineering requirement of localization o Value of risk pooling
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Short term: rationalize safety stock o Inventory control system used: periodic review. Order-up-to system o Key drivers of safety stock: Service target Variability: standard deviation of demand Lead time Review period Long term alternatives: o Alternatives Air shipment European factory Universal model Product line restructuring Improve forecast method Shorten review period More inventory o Drivers affected Reduce lead time Reduce variance Reduce review period Increase service Evaluate the alternatives: o Alternatives Air shipment European factory Universal model Product line restructuring Improve forecast method Shorten review period More inventory o Effectiveness Very expensive Volume not high enough Excessive cost Cannot afford Lose transport economies Deeper in the hole 6. More cost-benefits of DC-Localization: Stock of localization materials higher at DCs Lower value of transit inventory Potential freight reduction
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  • Fall '15
  • product line restructuring, supply chain characteristics

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