Embry LGMT683 Module 6.7 Additional Homework Exercise Latest 2016 sptember

Chapter 12 - Managing Uncertainty in a Supply Chain: Safety Inventory

1. Using the Wal-Mart Demo for Example 4Preview the documentView in a new window, what happens to the Required Safety Stock inventory when the Desired Customer Service level is increased to 95%? What happens to the Required Safety Stock inventory when the Desired Customer Service level is decreased to 80%? What about 70%? What did you learn from this exercise?

Note: This is not a “Solver” problem. Just change the service level directly in Excel from .90 to .80 and .70 to see the impact on safety inventory.

2. Using the Wal-Mart DemoPreview the documentView in a new window, what happens to the Required Safety Stock inventory when the periodic review interval is changed to quarterly, i.e., 12 weeks versus 4 weeks? What happens when it is changed to weekly, i.e., 1 week versus 4 weeks? What did you learn from this exercise?

Note: This is not a “Solver” problem. Just change the Review Interval directly in Excel from 4 weeks to 12 weeks to 1 week, respectively.