Question

- Assuming all of the strategic safety stock assumptions hold, consider a supply chain network
with the structure (not values) from class (and page 98 of the book). As before, you control
Stages 1, 2, 3, and 6; and Stages 1,5, and 7 are outside of your control. The desired service
level is om at all Stages; the inventory holding costs, measured in dollars per item per
week, are h = (200, 100, 100,50,50,50,50) (thus h = 200, h = 100, etc.); all travel times
between Stages are all 5 weeks, the processing times in weeks are T = (20, 10, 10,5,5,5,5);
and, the committed service times for the Stages 4, 5, and 7 are all 20 weeks. The average
weekly demand is 1000 units and the standard deviation is 100 units per week. The
performance measure is the total cost of holding safety stock
(a) Fixing Si = 30, choose S2, S, and S, to optimize your network to minimize the cost
due to safety for the portion of the network that is under your control. If there are
multiple scenarios to consider, discuss them.
(b) Using a solution to (a), draw and label the network diagram for this supply chain
system. Show where inventory will be held.
(c) For your solution, draw the Push/Pull boundary.
(d) Suppose that you can change S (as well as S. S; and Su). Determine the smallest
value of S, such that it will not be necessary to keep any inventory of Part 1.​

Answer 1

Answer:

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