# Supply Chain Management Essay

1905 Words Feb 27th, 2011 8 Pages
ndex

1. What has caused the so-called Inventory/Service "Crisis"? 1

2. What are the important "drivers" of safety stock? 2

3. Recommend quantitative target inventory levels for the six European options, assuming a weekly periodic review replenishment. 4

4. Assuming a 20% gross margin for each printer, sea transportation costs of \$1 per printer and air transportation costs of \$10 per printer (air shipment lead-time is three days), evaluate the various alternatives available to Brent Cartier to address the inventory and service problem. 6

5. Bibliography 8

1. What has caused the so-called Inventory/Service "Crisis"?

In 1990’s, Hewlett-Packard faced several problems with inventory levels for the Deskjet Printer
This is a system whereby any regularly used material is re-ordered when the inventory drops to a certain level. This level is usually a function of the lead time, daily demand, and safety stock.
•How Much to Order - The quantity to be ordered is determined through the Economic Order Quantity. The Fixed-Time Period Model is the inventory planning system where inventory policy consists in ordering at a designated time period regardless of whether the reorder point has been reached. This does not involve physical count of inventory items. Since the system is time triggered, it must have a larger average inventory to protect against stockout during the review period. In this model, there is a fixed quantity that HP should order each time, which is given by: q = Target Stock – Inventory (at the beginning of the period)

This way of compute the order quantity, leads us to the concept of Target Stock. This is the level of stock desired by the company at each moment of its operations, and it’s given by:
Target Stock = Average demand + Safety stock or Target Stock =[pic] + [pic]

Since we know that the level of inventory at the beginning of the year is equal to 0.9 months (in relation with demand), it is easy to compute the target stock. We assume a periodic review of one weak (0,25 months).

|Sea

## Related Documents

• ###### Essay on Supply Chain Management

SUPPLY CHAIN MANAGEMENT Supply Chain Management University of Maryland University College ITEC610 Section 1142 Semester 0809 Abstract This paper defines the concept of technology in Supply Chain Management used to promote planning, analyze and account for the operations of a supply chain business with the goal being increased profits as well as a satisfied clients. This paper will discuss how to accomplish the benefits of cost, and profits through the use…

Words: 4058 - Pages: 17
• ###### Essay Importance of Supply Chain Management

The Importance of Supply Chain Management Supply chain management (SCM) is very important and effective to all companies. David Simchi-Levi, Philip Kaminsky, and Edith Simchi-Levi defines supply chain management as “a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize systemwide costs while satisfying service…

Words: 957 - Pages: 4
• ###### Supply Chain Management Essay

ffective inventory management is at the core of supply chain management excellence. in-process, partner inventories and more, truly sits at the intersection of demand and supply. Yet our understanding of inventory management practices in many respects still has a long way to go. In fact, it is really only in the last decade or so that the direct link between inventory management Consultant Gerry Marsh, who works with some of the world’s largest companies, has than competitors will usually…

Words: 774 - Pages: 4
• ###### Supply Chain Management Essay

Q1 .Discuss the concept of supply chain and indicate its relevance in government budgeting process (10mks). Supply chain management (SCM) is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain.[2] Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Another definition…

Words: 6084 - Pages: 25
• ###### Supply Chain Management Essay

Introduction Supply chain management is an integral component of operation management and has a direct effect on how successfully organizations function. The purpose of supply chain management is to remove communication barriers and eliminate redundancies by coordinating, monitoring, and controlling processes within an organization. Identifying the components of the supply chain, facilitating better decision-making, creating improved communication, and identifying weak links in the chain causing bottlenecks…

Words: 2847 - Pages: 12
• ###### Essay The Product Of Supply Chain Management

Beer Game in class, which developed to educate and simulate what can happen in the traditional Supply Chain Management; this game exposed really interesting effect and dynamic of supply chain that can happen in the real world situation. This concept definitely enlightened me to think about the positive process influence on a lean fulfillment work-stream which effect overall logistic part of Supply Chain. During the game, each role was assigned as Retailer, Wholesaler, Distributor, and Factory. I was…

Words: 973 - Pages: 4
• ###### Essay The Supply Chain Management Process

The processes involved in the supply chain are very important to company. It is therefore very central and critical for the organization to make sure that it is operating or running a supply chain process that is very practical, efficient and sustainable and easy apply in terms of the daily expense. Sustainability means that the company is operating on sustainable resources, there are no environmental pollution, generates products that meet the needs of the customer among others. Also, the company…

Words: 1177 - Pages:
• ###### Supply Chain Management Essay

organization, and every company at least one supply chain relationship with another organization. Research has led to the conclusion that "the structure of activities within and between companies is a critical cornerstone of creating unique and superior supply chain performance" (Lambert, 2005). Successful supply chain management requires integrating business processes with key members of the supply chain, because valuable resources are wasted when supply chains are not effectively managed. Standard business…

Words: 1600 - Pages: 7
• ###### Essay Supply Chain Management

A. Analyze whether a Keiretsu network, a virtual company, a vertical integration, or a different supply chain strategy should be adopted. A Keiretsu network is a network of businesses that own stakes in one another as a means of mutual security, especially in Japan, and usually including large manufacturers and their suppliers of raw materials and components. There are two types of keiretsu: vertical and horizontal. Vertical keiretsu illustrates the organization and relationships within a company…

Words: 7311 - Pages: 30
• ###### Supply Chain Management Essay

THE IMPACT OF SUPPLY CHAIN MANAGEMENT ON GOVERNMENT INSTITUTIONS A Research Dissertation by GEORGE FREDERICK JACOBSON STUDENT NO. 94032512 B. TECH: PURCHASING MANAGEMENT Submitted in partial fulfilment of the requirements for the degree MBA in the Business School Faculty of Management Sciences TSHWANE UNIVERSITY OF TECHNOLOGY Supervisor: Prof. J A Watkins Pretoria 4 June 2007 PUBLICATION OF DISSERTATION The attention of the reader is specifically drawn to the…

Words: 23700 - Pages: 95