MGT 333 Lecture 1: MGT 333-Lecture
Document Summary
Characteristics of a supply chain: suppliers, plants, distribution centers, stores, final consumer, client tolerance time is shorter than the production time. As a result, you need to produce to stock. Supply chain management: a primary goal of supply chain management is to satisfy customer"s demand with the least amount of inventory. What elements determine the amount of needed inventory: average demand, demand variability, replenish time, order time, manufacturing time, transportation time, replenishment time variability. So to increase out availability, we must have: enough inventory to satisfy the demand during the replenishment time taking into account variability of both parameters. If inventory is no positioned in the right place, companies can experience a variety of problems related to too much or too little inventory. The central warehouse: create a central, or plant, warehouse to replenish all distribution centers. By doing this, the distributions centers only need inventory to cover transportation time and ordering time.
