Question: CURRENT BUFFER STOCK COMPARISON & RECOMMENDATIONS (25 points) Question No. 4. - Do current safety stocks protect the operation adequately from supplier delivery performance issues

CURRENT BUFFER STOCK COMPARISON & RECOMMENDATIONS

CURRENT BUFFER STOCK COMPARISON & RECOMMENDATIONS (25 points) Question No. 4. - Do current safety stocks protect the operation adequately from supplier delivery performance issues ? If not, how much safety stock do you suggest to be carried for each part number and in total stated in pieces and dollars ? Fill missing spaces in table to calculate. High Runner Purchased Parts PART NO. 1A1 PART NO. CCC PART NO. 2B2 Risk of Exposure to Material Shortages in Days (*) (3 days X 0.15)= 0.45 days (1day X 0.02)= 0.02 day (1 day X 0.1)= 0.1 day Current Planned Safety Stock in Days 0.29 day ? ? Position vs Current Safety Stock Level 0.16 day short ? ? Daily Requirement 3500 pcs 24000 pcs 1000 pcs Suggested Safety Stock Level in Pieces (0.45 X 3500)= 1575 pcs ? ? Suggested Safety Stock Level in Dollars ( 1575 X $500)= $ 788 M ? ? Suggested Total Safety Stock in pieces = Suggested Total Safety Stock in dollars = Tip Suggested Total Safety Stock in Dollars = Suggested SS for Part 121 + Suggested SS for part CCC + Suggested SS for Part 2B2 ( all in dollars)

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