Exam 12: Managing Uncertainty in a Supply Chain: Safety Inventory

The ability of a supply chain to delay product differentiation or customization until closer to the time the product is sold is

What is the descriptive term for demand that occurs not in a steady stream of single units but in periodic large lots?

A company that checks inventory status at regular periodic intervals and places an order to raise the inventory level to a specified threshold is using

A goal of any supply chain manager is to reduce the level of safety inventory required regardless of the affect product availability.

A(n) ________ in supply uncertainty can help ________ safety inventory required without hurting product availability.

A company that tracks inventory and places an order for a lot size Q when the inventory declines to the reorder point (ROP) is using

Describe the two types of ordering policies and the impact each has on safety inventory.

All inventory between a given stage in the supply chain and the final customer is called the

Safety inventory is inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period.

Weekly demand for avocados at the Guac Shop is normally distributed with a mean of 2500 and a standard deviation of 650. The store manager has decided to follow a periodic review policy to manage inventory of avocados. They plan to order every two weeks. The farmers currently take two weeks to fill an order. Given a desired CSL of 97.5 percent, how much safety inventory should the Guac Shop carry? What should their OUL be?

A shortage occurs in a replenishment cycle

The ability to provide a high level of product availability to customers while carrying very low levels of safety inventory in its supply chain has been a key to success at which company?

Which approach to aggregation would stock the fast-moving items at decentralized locations close to the customer and slow-moving items at a centralized location?

Scenario 12.3 - The Cat Café Daily demand for cat litter at the Cat Café in Jones is 1500 ounces with a standard deviation of 300 ounces. The proprietor orders the best cat litter money can buy online, and the average shipping time is 5 days. Of course, if the order is placed at the end of the week, then it may take a while longer to receive the shipment, so the standard deviation of lead time is 2 days. The state health department keeps a close eye on the condition of the Cat Café; a cat-loving inspector visits at least twice a week, ostensibly to inspect, but mostly to pet his favorite Scottish Fold cat named Groundskeeper Willie. -Suppose the café wishes to carry 8 days of demand as their safety inventory. What service level would they achieve?

________ is the ability of a supply chain to delay product differentiation or customization until closer to the time the product is sold.

Product availability reflects a firm's ability to fill a customer order out of available inventory.

In case demand in different geographical regions is about the same size and independent, aggregation increases safety inventory by the square root of the number of areas aggregated.

Inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period is

Which approach to aggregation has the goal of moving product differentiation as close to the pull phase of the supply chain as possible?

Given the product variety and high demand uncertainty in most high-tech supply chains, a significant fraction of the inventory carried is safety inventory.