edoc.site_solution-manual-for-supply-chain-management-4-e-su.pdf

Full file at http://testbanksolutions.org/Solution-Manual-for-Supply-Chain-Management,-4-E-Sunil-Chopra,-PeterMeinl

Chapter 11: Managing Economies of ScaleUncertainty in ScaleUncertainty in athe athe Supply Supply Chain: Safety Inventory

Exercise Solutions

!. D L " LD " #$%#&''% " (''  L "

L  D "

$ # $''% " $)&

ss " F S S -1 #CSL%   L " F S S -1 #'.*+%  $)& " 4(+ #here, F S S -1 #'.*+% " MS01 #'.*+%%

" DL 2 ss " ('' 2 4(+ " !'(+ ROP " E3el 5orksheet !!-! illustrates these omputations $. D L " (T+L) D " #$2&%#&''% " !+''  L "

T  L  "

$  & #$''% "

D

446

ss " F S S -1 #CSL%   L " F S S -1 #'.*+%  446 " 6&( #here, F S S -1 #'.*+% " MS01 #'.*+%% OUL " D(T+L) 2 ss " !+'' 2 6&( " $$&(

E3el 5orksheet !!-$ illustrates these omputations &. D L " LD " #$%#&''% " (''  L "

L  D "

$ # $''% " $)&

" #! 7 fr %Q " #! 7 '.**%+'' " + ESC " 5e use the folloing e3pression to etermine the safety stok #ss%:

ESC   ss9!  F S #

ss  L

%8   L f S #

ss  L

%


" 7 ESC " ss9! 7 NORMDIST # ss ss/ L, ', !, !%8 2  L NORMDIST # ss ss/ L, ', !, '%. 5e utilie the ;<=SEE> funtion in E?CE= in etermining safety stok #ss% by using ss as the hanging @alue that results in an ESC @alue of +. E3el 5orksheet !!-& illustrates these omputations. ;oal Seek set-up: SEA CE==: C$* A 1<=BE: + D C<;0; CE==: C$6 Ahis results in an a n ss @alue of 466 an the reorer point of: " DL 2 ss " ('' ('' 2 466 " !,'66 ROP " 4. D L " LD " #$%#$+'% " +''  L "

L  D "

$ #!+'% " $!$

ss " ROP 7 ss " ('' 7 +'' " !''

#('', +'', $!$% " M0SA #('', +'', $!$, !% " '.() CSL " F(D L + ss, D L ,  L ) " F #('',

ESC   ss9!  F S #

ss  L

%8   L f S #

ss

%

 L

" 7 ESC " ss9! 7 NORMDIST # ss ss/ L, ', !, !%8 2  L NORMDIST # ss ss/ L, ', !, '% " 4&.)( Fill rate #fr% " !- #ESC/G% " !- #4&.)(/!'''% " '.*( E3el 5orksheet !!-4 illustrates these omputations +. D L " LD " #$%#$+'% " +''

 L

"

L  $

$ "  D $ s L D

$  !+'

$

$

$

 $+' !.+ " 4&!

ss " F S S -1 #CSL%   L " F S S -1 #'.*+%  4&! " 6'* #here, F S S -1 #'.*+% " MS01 #'.*+%%


ESC   ss9!  F S #

ss  L

%8   L f S #

ss

%

 L

" 7 ESC " ss9! 7 NORMDIST # ss ss/ L, ', !, !%8 2  L NORMDIST # ss ss/ L, ', !, '% " * Fill rate #fr% " !- #ESC/G% " !- #*/!'''% " '.**!

Standard deviation of lead time

Required safety inventory

1.50 1.00 0.50 0.00

709 539 405 349

E3el 5orksheet !!-+ illustrates these omputations (. Folloing are the e@aluations for the >haki pants: isaggregate ption: D L " LD " #4%#)''% " &$''  L "

L  D "

4 #!''% " $''

Coeffiient of @ariation "

 /  "

!''/)'' " '.!&

-1 -1 ss per store " F S S-1 #CSL%   L " F S S #'.*+%  $'' " &$* #here, F S S #'.*+% " MS01 #'.*+%%

Aotal safety in@entory " #&$*%#*''% " $*(,'64 Aotal @alue of safety in@entory " #$*(,'64%#&'% " H),))$,$!' Aotal annual safety in@entory holing ost " #),))$,$!'%#'.$+% " H$,$$',++$ oling ost per unit sol " $$$'++$/#)''%#*''% " H&.')
D

C



kD " #*''%#)''% " 6$''''

Full file at http://testbanksolutions.org/Solution-Manual-for-Supply-Chain-Management,-4-E-Sunil-Chopra,-PeterMeinl C

 D



k  "

*'' #!''% " &'''

D L " LDC " #4%#)''%#*''% " $,))','''  L "

C

L D

"

4 #&'''% " ('''

ss " F S S -1 #CSL%   L " F S S -1 #'.*+%  (''' " *)(* #here, F S S -1 #'.*+% " MS01 #'.*+%%

Aotal safety in@entory " *)(* Aotal @alue of safety in@entory " #*)(*%#&'% " H$*(,'6' Aotal annual safety in@entory holing ost " #$*('6' %#'.$+% " H64,'!) oling ost per unit sol " 64'!)/#)''%#*''% " H'.! Sa@ings in the holing ost per unit sol from aggregation " H&.') - H'.! " H$.*)

Folloing are the e@aluations for the Cashmere Seaters: isaggregate ption: D L " LD " #4%#+'% " $''  L "

L  D "

4 #+'% " !''

Coeffiient of @ariation "

 /  "

+'/+' " !

-1 -1 ss per store " F S S-1 #CSL%   L " F S S #'.*+%  !'' " !(4 #here, F S S #'.*+% " MS01 #'.*+%%

Aotal safety in@entory in@entory " #!(4%#*''% " !46,('' Aotal @alue of safety in@entory " #!46,('' %#!''% " H!4,6(',''' Aotal annual safety in@entory holing ost " H!4,6(',''' %#'.$+% " H&,(*',''' oling ost per unit sol " H&,(*',''' !/#+'%#*''% " H)$ ote: the abo@e are also inorret inorret on the orksheet. orksheet.
D

C



kD " #*''%#+'% " 4+'''


 D



k  "

*'' #+'% " !+''

D L " LDC " #4%#+'%#*''% " !)''''  L "

C

L D

"

4 #!+''% " &'''

ss " F S S -1 #CSL%   L " F S S -1 #'.*+%  &''' " 4*&+ #here, F S S -1 #'.*+% " MS01 #'.*+%%

Aotal safety in@entory " 4*&+ Aotal @alue of safety in@entory " #4*&+%#!''% " H4*&,4+( Aotal annual safety in@entory holing ost " #4*&4+(%#'.$+% " H!$&,&(4 oling ost per unit sol " !$&&(4/#+'%#*''% " H$.64 Sa@ings in the holing ost per unit sol from aggregation " H)$.)4 - H$.64 " H6*.+' Centraliation results in sa@ings for both prouts, but it is e@ient that sa@ings in holing ost per unit sol from aggregating aggregating Cashmere Seaters is higher higher than >haki pants. pants. So, Cashmere Seaters are better for entraliation. E3el 5orksheet !!-( illustrates these omputations. 6.

isaggregate ption: Frane: D L " LD " #)%#&'''% " $4'''  L "

L  D "

) $''' " +(+6

ss at Frane " F S S -1 #CSL%   L " F S S -1 #'.*+%  +(+6 " *&'+

#here, F S S-1 #'.*+% " MS01 #'.*+%% Ahe ss at the other fi@e ountries is e@aluate in a similar manner, hih results in a total ss for Europe of 4),&)4
Full file at http://testbanksolutions.org/Solution-Manual-for-Supply-Chain-Management,-4-E-Sunil-Chopra,-PeterMeinl (

C

D   D

" &''' 2 4''' 2 $''' 2 $+''2 !''' 2 4''' " !(+''

i

i !

( C

 D







$

i

"

$'''

$

$

$

$

$

 $$''  !4''  !(''  )''  $4''

$

" 444+.$$

i !

D L " LDC " #)%#!(+''% " !&$,'''  L "

C

L D

"

) # 444+ .$$% " !$+6&

ss " F S S -1 #CSL%   L " F S S -1 #'.*+%  !$+6& " $',()! #here, F S S-1 #'.*+% " MS01 #'.*+%%

0n@entory sa@ings from aggregation " 4),&)4 7 $',()!" $6,6'4 E3el 5orksheet !!-6 illustrates these omputations. ). #a% isaggregate ption: From the pre@ious problem, e kno that the total ss for Europe is 4),&)4 oling ost " #$''%#'.$+%#4)&)4% " H$,4!*,$''

*. Sine the eman at @arious loations is not inepenent, e utilie the folloing e3pressions for the aggregate option: DC "

k

i ! D i k

@ar# D C %   Ii$  $  i !

C D 



i j

 ij  i  j

@ar# DC %

For  " '.$

C D 



@ar# DC %

 L "

L D

C

"

"

$

$

$'''  . .  $4''  $#'.$%J#$'''%#$$''%  . .  #)''%#$4''%

$'''$  . .  $4''$  $#'.$%J#$'''%#$$''%  . .  #)''%#$4''%K

)

" !6&'6 ss " F S S -1 #CSL%   L " F S S -1 #'.*+%  !6&'6 " $)4(6 #here, F S S -1 #'.*+% " MS01 #'.*+%%

0n@entory sa@ings from aggregation " 4),&)4 7 $),4(6" !*,*!) oling ost sa@ings from aggregation " #$''%#'.$+%#!**!)% " H**+,*'' Ahe folloing table shos the sa@ings as the orrelation oeffiient inreases from ' to ! ith inrements of '.$

Corr.Coeff.

Replenishment Lead Time (Weeks)

995!".#

$

"



%&

& &.'

$979 $979,4 ,474 74 $704 $704,1 ,191 91

$1,1 $1,199 99,6 ,606 06 $862 $862,4 ,454 54

$1,3 $1,385 85,1 ,185 85 $995 $995,8 ,876 76

$1,5 $1,548 48,6 ,684 84 $1,1 $1,113 13,4 ,424 24

$1,6 $1,696 96,4 ,498 98 $1,2 $1,219 19,6 ,694 94

&.$

$489,462

$599,466

$692,203

$773,907

$847,772

&." &.

$307,211 $146,047

$376,255 $178,870

$434,462 $206,542

$485,743 $230,921

$532,105 $252,961

$0

$0

$0

$0

$0

%

%'


E3el 5orksheet !!-* illustrates these omputations. !'. Using Sea Transportation:

<@erage bath sie " A " #+'''%#$'% " !'','''

 L "

L  D "

&( # 4'''% " $4,'''

ss " F S S -1 #CSL%   L " F S S -1 #'.**%  $4''' " ++)&$ #here, F S S -1 #'.**% " MS01 #'.**%%

ays of safety in@entory " ++)&$/+''' " !!.!6 ays <@erage yle in@entory " bath sie/$ " !'''''/$ " +',''' ays of yle in@entory " +''''/+''' " !' ays Aotal in@entory ost #yle 2 safety% " #+'''' 2 ++)&$%#!''%#'.$% " H$,!!(,(4' Aransportation Aransportation ost per year " #'.+%#+'''%#&(+% " H*!$,+''
<@erage bath sie " A " #+'''%#!% " +,'''

 L "

L  D "

4 # 4'''% " ),'''

ss " F S S -1 #CSL%   L " F S S -1 #'.**%  )''' " !),(!! #here, F S S -1 #'.**% " MS01 #'.**%%

ays of safety in@entory " !)(!!/+''' " &.6$ ays <@erage yle in@entory " bath sie/$ " +'''/$ " $,+'' ays of yle in@entory " $+''/+''' " '.+ ays Aotal in@entory ost #yle 2 safety% " #$+'' 2 !)(!!%#!''%#'.$% !)(!!%#!''%#'.$% " H4$$,$$'


Aransportation Aransportation ost per year " #!.+%#+'''%#&(+% " H$,6&6,+''

!!. Using Sea Transportation:

<@erage bath sie " A " #+'''%#$'% " !'','''

 L "

L  T  " D

&(  $' #4'''% " $*,*&&

ss " F S S -1 #CSL%   L " F S S -1 #'.**%  $**&& " (*,(&+ #here, F S S-1 #'.**% " MS01 #'.**%%

ays of safety in@entory " (*(&+/+''' " !&.*& ays OUL " D(T+L) + ss " +'''#&(2$'% 2 (*(&+ " &4*,(&+

<@erage yle in@entory " bath sie/$ " !'''''/$ " +',''' ays of yle in@entory " +''''/+''' " !' ays Aotal in@entory ost #yle 2 safety% " #+'''' 2 (*(&+%#!''%#'.$% " H$,&*$,6'' Aransportation Aransportation ost per year " #'.+%#+'''%#&(+% " H*!$,+''
<@erage bath sie " A " #+'''%#!% " +,'''

 L "

L  T  " D

4  !#4'''% " ),*44

ss " F S S -1 #CSL%   L " F S S -1 #'.**%  )*44 " $',)'6 #here, F S S -1 #'.**% " MS01 #'.**%%

ays of safety in@entory " $')'6/+''' " 4.!( ays OUL " D(T+L) + ss " +'''#!24% 2 $')'6 " 4+,)'6

<@erage yle in@entory " bath sie/$ " +'''/$ " $,+''


ays of yle in@entory " $+''/+''' " '.+ ays Aotal in@entory ost #yle 2 safety% " #$+'' 2 $')'6%#!''%#'.$% " H4((,!+' Aransportation Aransportation ost per year " #!.+%#+'''%#&(+% " H$,6&6,+''
!$. ss " ROP – DL " 6+' 7 &''#$% " 6+'-('' " !+'  L "

L  D "

$ #!''% " !4!.4$

6+', ('', !4!.4$ ) " M0SA #ss/ L, ',!,!% " )+.+(L CSL = F(D L + ss, D L ,  L ) = F( 6+',

ESC   ss9!  F S #

ss  L

%8   L f S #

ss

%

 L

" 7 ESC " ss9! 7 NORMDIST # ss ss/ L, ', !, !%8 2  L NORMDIST # ss ss/ L, ', !, '% " !' Fill rate #fr% " !- #ESC/G% " !- #!'/!+''% " '.**& 0f the ROP inrease inrease from 6+' to )'' the fill rate ill inrease to '.**( E3el 5orksheet !!-!$ illustrates these omputations.

!&. Fill rate #fr% " !- #ESC/!+''% " '.*** So, ESC " !.+


ESC   ss9!  F S #

ss  L

%8   L f S #

ss

%]

 L

" 7 ESC " ss9! 7 NORMDIST # ss ss/ L, ', !, !%8 2  L NORMDIST # ss ss/ L, ', !, '% " !.+ 5e use the ;<=SEE> funtion in etermining the safety stok #ss% by using ss as the hanging @alue that results in an ESC @alue of !.+.

;oal Seek set-up: SEA CE==:
!4. #a% isaggregate ption:

 L T " L  T  D "

&  6 #+'%

" !+)

-1 ss per store " F S S-1 #CSL%   L " F S S #'.**%  !+) " &(6.)&

#here, F S S -1 #'.**% " MS01 #'.**%% Aotal safety in@entory " #&(6.)&%#$+% " *!*+.6
D

C



kD " #$+%#&''% " 6+'' k

@ar# D C %   Ii$  $  i !

C D 



@ar# DC %

i j

 ij  i  j


" $+ #+'% " $+' #e are assuming that  " '. 0f  is not ' then the o@ariane  D  k  terms ha@e to be inlue%

 L T "

L

C  T  D "

&  6 #$+'% "

6*!

ss " F S S -1 #CSL%   L " F S S -1 #'.**%  6*! " !)&*.!4 #here, F S S -1 #'.**% " MS01 #'.**%%

Bnits sa@ings from aggregation " *!*+.6 7 !)&*.!4 " 6&+(.+( 0n@entory sa@ings " #6&+(.+(% #!'% " H6&,+((
-1 L  D " F S S #'.*+% 

4 #!+% " 4*.&+


ss #aross all large ealers% " #+%#4*.&+% " $4(.6& Popular 1ariant at Small ealer: eentralie: ss #at eah small ealer% " F S S -1 #CSL% 

-1 L  D " F S S #'.*+% 

4 #+% " !(.4+

ss #aross all small ealers% " #&'%#!(.4+% " 4*&.4( #b % Popular 1ariant all 0n@entories Centralie: eman per perio " eman at large ealers 2 eman at small ealers " #+'%#+% 2 #!'%#&'% " ++' Stanar e@iation of eman per perio " +#!+% $  &'#+% $ " 4&.&' ss #at regional arehouse% " F S S -1 #CSL% 

-1 L  D " F S S #'.*+% 

4 # 4&.&'% " !4$.4+

reution in safety in@entory from omplete aggregation " $4(.6& 2 4*&.4( 7 !4$.4+ " +*6.64 holing ost sa@ings per year " #+*6.64%#$''''%#'.$% " H$,&*',*4$.+$ proution 2 transportation transportation ost inrease per per year " #++'%#!''%#+$% " H$,)(',''' H$,)(',''' #% Popular 1ariant 1ariant only Small ealer 0n@entories Centralie: eman per perio " eman at small ealers " #!'%#&'% " &'' Stanar e@iation of eman per perio " &'#+% $ " $6.&* ss #at regional arehouse% " F S S -1 #CSL% 

-1 L  D " F S S #'.*+% 

4 # $6.&*% " *'.'*

reution in safety in@entory from small ealer entraliation " 4*&.4( 7 *'.'* " 4'&.&( holing ost sa@ings per year " #4'&.&(%#$''''%#'.$% " H!,(!&,44' proution 2 transportation transportation ost inrease per per year " #&''%#!''%#+$% " H!,+(',''' H!,+(','''

#% Centraliing in@entories from small ealers an eentraliing at large ealers is the optimal strategy #e% Similar analysis an be performe for the unommon @ariant #See E?CE= orksheet !!-!+ for more etails%


#f% For the popular @ariant, entralie in@entories from small ealers an eentralie at large ealers. For the unommon @ariant, entralie all in@entories. in@entories. E3el 5orksheet !!-!+ illustrates these omputations. !(. igh @olume @ariant ithout omponent ommonality: ss #for the @ariant% " F S S -1 #CSL% 

-1 L  D " F S S #'.*+% 

4 # $''% " (+6.*4

ss #aross all high @olume @ariants% " #!%#(+6.*4% " (+6.*4 =o @olume @ariant ithout omponent ommonality:

ss #for the @ariant% " F S S -1 #CSL% 

-1 L  D " F S S #'.*+% 

4 # $' % " (+.6*

ss #aross all lo @olume @ariants% " #*%#(+.6*% " +*$.!+ #b  % 5ith omplete ommonality: eman per perio " eman for high @olume @ariant 2 eman for lo @olume @ariant " #!'''%#!% 2 #$)%#*% " !$+$ Stanar e@iation of eman per perio " !#$''% $  *#$'% $ " $').)! ss " F S S -1 #CSL% 

-1 L  D " F S S #'.*+%  )()(.*!

reution in safety in@entory from omplete ommonality " (+6.*4 2 +*$.!+ 7 ()(.*! " +(&.!) holing ost sa@ings per year " #+(&.!)%#!'''%#'.$% " H!!$,(&+.+4 omponent ost inrease per perio " #!$+$%#$+%#+$% " H!,($6,('' aitional ost at hih omplete ommonality is Nustifie " !!$(&+.+4/#!$+$%#+$% !!$(&+.+4/#!$+$%#+$% " H!.6& Commonality is not Nustifie aross all @ariants beause of inrease osts. #  e% nly lo @olume @ariant uses ommonality eman per perio " eman for lo @olume @ariant " #$)%#*% " $+$ Stanar e@iation of eman per perio " *#$'% $ " ('


ss " F S S -1 #CSL% 

-1 L  D " F S S #'.*+% 

4 #('% " !*6.&)

reution in safety in@entory from lo @olume @ariant using ommonality " +*$.!+ 7 !*6.&) " &*4.6( holing ost sa@ings per year " #&*4.6(%#!'''%#'.$% " H6),*+$.*6 omponent ost inrease per perio " #$+$%#$+%#+$% " H&$6,('' aitional ost at hih omplete ommonality is Nustifie " 6)*+$.*6/#$+$%#+$% " H(.'& Commonality is not Nustifie aross lo @olume @ariants beause of inrease osts.

E3el 5orksheet !!-!( illustrates these omputations.

edoc.site_solution-manual-for-supply-chain-management-4-e-su.pdf

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