Managing Uncertainty in a Supply Chain - Impact of Aggregation on Safety Inventory
5 important questions on Managing Uncertainty in a Supply Chain - Impact of Aggregation on Safety Inventory
Give 2 major disadvantages of aggregating all inventories in one location
- Increase in response time to customer order
- Increase in transportation cost to customer
What is the square-root law?
What kind of impact has the coefficient of variation of an item?
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In which two situations do substitutions occur?
- Manufacturer-driven substitution; manufacturer or supplier decides to substitute, higher-value product for a lower-value product that is not in inventory.
- Customer-driven substitution; customers decide to substitute, low-value product for a high-value product
What is component commonality and what effect does it have?
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