Design, Analysis and Optimization of Supply Chains by Killingsworth William R

Author:Killingsworth, William R....
Language: eng
Format: epub
Published: 2014-05-02T19:24:41.727000+00:00

In Table 4.2, the manufacturing safety stock is no longer zero; IA optimizes the safety stock levels at all locations. Notice the substantial reduction in working capital as compared to Table 4.1, particularly for the high-demand uncertainty cases. Note that in Table 4.1, for the 30-day CST with demand uncertainty 9, 102 new products must be stored at the OEM if no safety stock is allowed in the manufacturing tiers, but, as seen in Table 4.2, only 41.1 are recommended if manufacturing safety stock is allowed. The much less expensive manufacturing safety stock is sufficient to maintain fill rate at a much lower level of working capital.

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