GMS 805 Lecture Notes - Lecture 4: Management System
17 Nov 2016
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Document Summary
Discussion questions for norton auto supply: evaluate the current inventory planning and control system at. Carried safety stock equivalent to 4 weeks demand i. e. the regional distribution centre (rdc) and central distribution. Centre (cdc), are more of elementary stock management systems. Optimize the ordering policy to achieve 99% csl at cdc. For each item how much cost would you save under your proposed policy compared to the current policy: monica is planning to decrease overall csl of rdc"s to 96% but with a guarantee of 3% overnight shipments. For this part assume that the real cost of using fedex is a fixed rate of per lb. (no minimum restrictions). Note: assume1year=12months=12*4weeks, the order costs mentioned ( and ) apply to the ordering of each product separately, holding cost of 26% is on a yearly basis, assumecontinuousnumbersarepossibleforyourinventorylevels,orderl evels,etc, assumethatleadtimes(1,2or6forthecdc)arefixed, demandisnormallydistributed.
