What is the role of safety inventory in the supply chain?
Answer to relevant QuestionsConsider a firm like Zara that has developed production capabilities with very short replenishment lead times. Do you think this capability is more valuable for its online operations or its store operations? Why? Describe the two types of ordering policies and the impact that each of them has on safety inventory. Consider two products with the same margin carried by a retail store. Any leftover units of one product are worthless. Leftover units of the other product can be sold to outlet stores. Which product should have a higher ...Wal-Mart designs its networks so that a DC supports several large retail stores. Explain how the company can use such a network to reduce transportation costs while replenishing inventories more frequently. For a manufacturer that sells to many retailers, why does a quantity flexibility contract result in less information distortion than a buy-back contract?
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