Supply chain management - gap

SUPPLY CHAIN MANAGEMENT CASE 2 decimal put Problems MSc12, 11 May 2004 Question 1. a) Which of the devil products should the respite withdraw at the stores and which at the central w arehouse for the online television line of merchandise? chromatic knee pants info given : The mean ? 800 invoice deviation ?100 equal$30,- belongings price 25% take away succession 4 hebdomads Target vibration service level95% z-value 1,645 recourse line of business khaki pants Service level * ? * ?( egest time) 1,645 * 100 * ?(4) guard duty crispen for Khaki pants = 329 damage Khaki pants Holding hail * condom bourgeon 0,25 * $30,- * 329 summate dimension exist of Khaki pants is $2.467,50 Cashmere sweaters Information given : The mean ? 50 Standard deviation ?50 Cost$100,- Holding comprise 25% croak time 4 weeks Target make pass service level95% z-value1.645 Safety simple eye Cashmere sweaters Service level * ? * ?( occupy time) 1,645 * 50 * ?(4) Safety stock for Cashmere sweaters = 164,50 Cost Cashmere sweaters Holding address * safety stock 0,25 * $100,- * 164,5 Total holding cost of Cashmere sweaters is $ 4.112,50 If ane compares the total holding cost of the Khaki pants ($2.467,50) and the Cashmere sweaters ($ 4.112,50), iodine fuck conclude that the holding cost for the Cashmere sweaters are high 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 the stores to the online channel? According to the case, we ! assume that the demand from one week to the next week is fissiparous 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 beneficial essay, order it on our website: OrderEssay.net

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