ADM 3302 Lecture Notes - Lecture 8: Facility Location Problem, Cost Leadership, Supply Chain Network
5 Apr 2019
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> two broad options: manage supply using capacity, inventory, subcontracting, and backlogs, manage demand using short-term price discounts and promotions. > use of dual facilities specialized and exible. > designing product exibility into production processes: managing inventory. > build inventory of high demand or predictable demand products. > levelling capacity forces inventory to build up in anticipation of seasonal variation in demand. > carrying low levels of inventory requires capacity to vary with seasonal variation in demand or enough capacity to cover peak demand during season. > with promotion, three factors lead to increased demand: market growth, stealing share, forward buying. 1: cost of holding inventory, cost of changing the level of capacity, product margins. > analyze the impact of a promotion on demand and the resulting optimal aggregate plan (see example in slides) Chapter 5 - network design in the supply chain: The role of network design in the supply chain:
