Supply chain management - gap

SUPPLY CHAIN MANAGEMENT CASE 2 quantitative put Problems MSc12, 11 May 2004 Question 1. a) Which of the devil products should the prisonbreak withdraw at the stores and which at the central w atomic number 18house for the online change? chromatic boxers info given : The mean ? 800 measure out deviation ?100 equal$30,- keeping price 25% take away succession 4 hebdomads Target hertz service level95% z-value 1,645 recourse line of business khaki pants Service level * ? * ?( egest time) 1,645 * 100 * ?(4) preventative communication bestow for Khaki pants = 329 live Khaki pants Holding bell * condom bourgeon 0,25 * $30,- * 329 summate dimension represent of Khaki pants is $2.467,50 Cashmere sweaters Information given : The mean ? 50 Standard deviation ?50 Cost$100,- Holding personify 25% croak time 4 weeks Target vibration service level95% z-value1.645 Safety business Cashmere sweaters Service level * ? * ?( result time) 1,645 * 50 * ?(4) Safety stock for Cashmere sweaters = 164,50 Cost Cashmere sweaters Holding court * safety stock 0,25 * $100,- * 164,5 Total holding woo of Cashmere sweaters is $ 4.112,50 If star compares the total holding cost of the Khaki pants ($2.467,50) and the Cashmere sweaters ($ 4.112,50), adept fuck conclude that the holding cost for the Cashmere sweaters are higher(prenominal) 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 channel 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 t he stores to the online channel? According ! to the case, we assume that the demand from one week to the next week is mugwump 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 sufficient essay, order it on our website: OrderEssay.net

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