session 13 safety stock inventory management

Five factors that determine safety stock

variability of demand, average length of lead time, and demand, desired service level and variability of lead time

Push System

based upon forecasting supply and demand, it is a method of producing, transporting and storing inventory

When Supply exceeds Demand you should use..

relative quantity

Bullwhip Effect

small change in demand downstream causing a extreme change in demand upstream

What does the Bullwhip effect cause?

excessive inventory throughout the supply chain

Inventory Positioning

deciding where in the supply chain to hold inventory

Geographic Inventory Pooling

holding safety stock in a single location instead of multiple locations

Postponement

holding partially assembled components that can be configured in various ways