Question $1)$ Using the BASE CASE PLAN template, build a replenishment plan for your product based on the information provided in the REPLENISHMENT MODEL SCENARIO. You need to determine how much to order and when, and project what your inventory levels will be until the end of the current planning horizon $($week of Jan. $29,2024).$ You should consider the trade $-$off between holding too much inventory and having enough inventory to meet customer orders.

REPLENISHMENT MODEL SCENARIO

You work as a Supply Chain Coordinator for a company that operates a distribution centre in Calgary. Your company has established a relationship with a supplier in Croatia, and imports products from Croatia on a regular basis to sell to the local market.

Supply details:

Country of origin: Croatia

Modes of transportation: intermodal container $($by ship $,$ then over the road $)$

Order quantity : multiples of $500$ units

Supply lead $-$time : $5$ weeks

Note : supply lead time is the elapsed time between when a purchase order is placed and when the product is delivered to your distribution centre $.$

You are responsible for managing inventory for a group of products that are considered $"$ A$"$ class items $($high priority $).$ On a weekly basis $,$ you monitor current inventory levels $,$ in $-$transit inventory $,$ timing of deliveries $,$ customer sales order levels $,$ and sales forecasts $.$ You are responsible for planning replenishment orders with the supplier $,$ i$.$e$.$ you must determine how much product to order and when the product needs to be delivered $.$

Shown below is some information pulled from your company's ERP system for one of the products you manage :

Sales forecast :

Weekly forecast for November $/$ December $2023$ : $1700$ units

Weekly forecast for January $2024$ : $1800$ units

Customer sales order lead $-$time : $2$ weeks Open sales orders :

Week of Nov. $13$ : $700$ units

Week of Nov. $20$: $1300$ units

Current on $-$site inventory : $11200$ units

Target inventory levels : $6$ weeks of demand $,$ based on the annual forecast for each year Current purchase orders in$-$transit $($ estimated delivery times $)$:

Week of Nov. $13$: $1000$ units

Week of Nov. $20$ : $1500$ units

Week of Nov. $27$ : $1500$ units

Week of Dec. $4$: $2000$ units

Week of Dec. $11$ : $1000$ units

Question$2)$ You have completed your replenishment plan for the week $,$ distributed the plan internally $,$ and placed your purchase orders with your supplier $.$ Right afterwards $,$ you hear through "unofficial channels $"$ that the sales forecast for $2024$ might be incorrect $,$ since your company's sales team is anticipating sales in $2024$ to double compared to the $2023$ forecast $.$

Using the CONTINGENCY PLAN template $,$ build a secondary replenishment plan which considers this additional information.

Assume a 'worse$-$case' scenario, in which $2024$ sales are twice the $2023$ forecast.

Question$3)$ Inventory Management : trade $-$off between cost control and customer service

Forecasting : is critical $,$ in addition to seeing actual customer orders

Information : perfect information is rare $,$ uncertainty is common

Communications : continual $,$ required all along the supply chain

Contingency planning : anticipating what could go wrong $,$ and preparing for it

Vigilance : SCM is a career $($not by accident $)$

$($i$)$ Describe the trade$-$off between cost control and customer service created by the scenario in Question $2.$

$($ii$)$ Considering the factors above, suggest what could be done to improve the inventory management system at your company, to prevent such disruptive events in the future.

Base plan

Contingency plan