Supply Chain Management

Scenario: Mr Asif, inventory manager in a retail company is given the task of creating a lean supply chain for product X for the company . He collected the necessary information towards lean supply chain for the company and he has the following information available to him. The annual demand for the product X is 48,000 units. The average lead time is 4 weeks. The standard deviation of demand during lead time is 70 units. The cost of ordering is $400 per order. The cost of purchase of the product per unit is $ 10. The carrying cost per unit per year is 15% of purchase price. The expected service level is 95%.

Task 1 As a first step, Asif will apply Economic Order Quantity( EOQ) model of inventory management

Task 2 If Asif decides to follow Q system of inventory management , interpret how this inventory management system is useful for efficient and effective supply chain management for the product X.

Task 3 If Asif decides to follow P system of inventory management , interpret how this inventory management system is useful for efficient and effective supply chain management for the product X