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FreshVegies is a provider of fruits and vegetables to restaurants. They purchase supplies from farms, cleans and packages them and then deliver them to distributors
FreshVegies is a provider of fruits and vegetables to restaurants. They purchase supplies from farms, cleans and packages them and then deliver them to distributors from where it is then distributed to restaurants of all sizes. FreshVegies supports three distributors. Currently, each distributor orders independently and randomly. FreshVegies has been experiencing high variability in the incoming orders from the distributors making aggregate planning more difficult, and there is a large risk of overage as well as underage in every planning period. You have been assigned to help FreshVegies troubleshoot this problem and recommend ways to reduce this variability. You have been provided with the below details: Each distributor has the same demand pattern. "Size" of bullwhip effect as the ratio between the variance in incoming orders from all distributors over the variance of the demand from all distributors. A forecast for the demand faced by each of the distributors is given in this Excel-file. The inventory policy assumed is base stock policy ( Please refer to Key Concept Document to understand basic concept of base stock policy)
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