Product and Process Design for Supply Chain Management (back to catalog)

OverviewSample 1Sample 2Sample 3Sample 4Sample 5Sample 6About the Author

...When looking at demand for your own products, it is wise not to make qualitative assumptions regarding independence without checking the numbers carefully. A medical device company was recently surprised to learn that demands across its different product lines were highly correlated; they had incorrectly thought that sales across product lines would be independent! Some reasons for this could be sales-force incentives or quarterly budget targets; whatever the cause, correlation of demands reduces the benefit of risk pooling.

The results of the "quick estimate" formula for values of N from 1 to 25 are plotted in the figure below. Note that for high values of N there are large reductions in safety stock:

Exercises

There are three short exercises below. Use the menu below to try each one:

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Suppose your company's sales for the last 12 months were as follows (some rows may be blank):

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SCM106 Specifications

Title: Product and Process Design for Supply Chain Management

Rating:
4.3 / 5  (1145 ratings)

Total Reading Time: Approx. 1 - 2 hours (for average readers)

Word Count: Approx. 10,600 words

Author:

Certificate: Counts toward Fundamentals of Supply Chain Management

Datasheet:  Download

Contents

  1. Introduction; Component Commonality, Modularity, Modular vs. Integral Design
  2. Universality
  3. Framework for Costs and Benefits
  4. Benefits of Design Changes
  5. Benefits of Design Changes, Continued
  6. Postponement: The HP Deskjet Printer
  7. Postponement Costs and Benefits (Deskjet Printer, continued)
  8. A Quick Estimate of Postponement Benefits from Reduced Inventories
  9. Packaging Postponement
  10. Postponement via Software
  11. End-of-Life and New Product Situations
  12. Process Design for Postponement
  13. Mass Customization
  14. Incentive Issues
  15. Conclusions
  16. Test Your Knowledge
  17. Feedback
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