Question
I'm stuck on this one.... I can't figure out the echelon portion of this and what formulas to use. Suppose a new, centralized warehouse is
I'm stuck on this one.... I can't figure out the echelon portion of this and what formulas to use.
Suppose a new, centralized warehouse is added to serve Atlanta, Boston, Chicago, and Dallas as shown in Figure 1c. The manufacturing facility will continue to serve the Los Angles warehouse given its proximity and newly added centralized warehouse. Assuming that all warehouses are following the continuous review inventory policy, compute and describe its inventory management policy and associated cost. Keep in mind that the centralized warehouse is one echelon above regional warehouses. Ignore inbound and outbound transportation cost. Provide answers and calculations for order quantity, demand during lead time, safety stock, average inventory level, inventory holding cost per week, ordering cost per week, and total cost per week.
| Q* | Ddlt | SS | Avg Inv | Inv cost | Ord Cost | Tot Cost |
Atlanta |
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Boston |
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Chicago |
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Dallas |
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LA |
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Central Warehouse |
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| Total cost of the distribution system 1c |
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| Total cost of the distribution system 1a |
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| Total cost of the distribution system 1b |
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Information:
90% servie rate / z=1.29
order cost | holding cost/unit | ||
mixed model | central warehouse | $ 3,000.00 | $ 1.00 |
fegional wareshoue | $ 3,000.00 | $ 1.25 |
HISTORICAL demand for 12 weeks | ||||||||||||
Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
Atlanta | 33 | 45 | 37 | 38 | 55 | 30 | 18 | 58 | 47 | 37 | 23 | 55 |
Boston | 26 | 35 | 41 | 40 | 46 | 48 | 55 | 18 | 62 | 44 | 30 | 45 |
Chicago | 44 | 34 | 22 | 55 | 48 | 72 | 62 | 28 | 27 | 95 | 35 | 45 |
Dallas | 27 | 42 | 35 | 40 | 51 | 64 | 70 | 65 | 55 | 43 | 38 | 47 |
Los Angels | 32 | 43 | 54 | 40 | 46 | 74 | 40 | 35 | 45 | 38 | 48 | 56 |
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