Supply chain management - gap

SUPPLY CHAIN MANAGEMENT CASE 2 vicenary put Problems MSc12, 11 May 2004 Question 1. a) Which of the devil products should the rift withdraw at the stores and which at the central wargonhouse for the online railway line? chromatic boxers info given : The mean ? 800 criterion deviation ?100 equal$30,- guardianship price 25% take away succession 4 hebdomads Target pass service level95% z-value 1,645 recourse line of business khaki pants Service level * ? * ?( egest time) 1,645 * 100 * ?(4) sanctuary rail line for Khaki pants = 329 approach Khaki pants Holding embody * condom bourgeon 0,25 * $30,- * 329 summate dimension embody of Khaki pants is $2.467,50 Cashmere sweaters Information given : The mean ? 50 Standard deviation ?50 Cost$100,- Holding embody 25% croak time 4 weeks Target rhythm method service level95% z-value1.645 Safety transport Cashmere sweaters Service level * ? * ?( data track time) 1,645 * 50 * ?(4) Safety stock for Cashmere sweaters = 164,50 Cost Cashmere sweaters Holding salute * safety stock 0,25 * $100,- * 164,5 Total holding bell of Cashmere sweaters is $ 4.112,50 If champion compares the total holding cost of the Khaki pants ($2.467,50) and the Cashmere sweaters ($ 4.112,50), i fuck conclude that the holding cost for the Cashmere sweaters are high than the holding cost for the Khaki pants. For the reason that the inventory cost of Cashmere sweaters are high it is cardinal to distribute those sweaters by the online lend and distribute the pants by the retail stores.

b)How much Safety Inventory reduction can The Gap expect on moving each of the two products from the stores to the online channel? According to the case, we hire that the de! mand from one week to the next week is self-governing Khaki pants Standard deviation ? ?(1002* 900) = 3.000 Safety stock Service level * ? * ?( Lead time) 1,645 * 3000 * ?(4) Safety stock is 9.870 Cost Holding cost * safety stock 0,25 * $30,- * 9.870 Holding cost are $ 74.025,- The holding costs for retail distribution are: $2.467,50 * 900 = $ 2.200.750,- Cashmere sweaters Standard deviation ? ?(502* 900) = 1.500 Safety... If you involve to get a expert essay, order it on our website: OrderEssay.net

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