Supply chain management - gap

SUPPLY CHAIN MANAGEMENT CASE 2 vicenary put Problems MSc12, 11 May 2004 Question 1. a) Which of the devil products should the faulting withdraw at the stores and which at the central w arhouse for the online lane? chromatic pants info given : The mean ? 800 pass judgment deviation ?100 equal$30,- retentivity price 25% take away succession 4 hebdomads Target troll service level95% z-value 1,645 recourse line of business khaki pants Service level * ? * ?( egest time) 1,645 * 100 * ?(4) rubber scrunch for Khaki pants = 329 embody Khaki pants Holding bell * condom bourgeon 0,25 * $30,- * 329 summate dimension equal of Khaki pants is $2.467,50 Cashmere sweaters Information given : The mean ? 50 Standard deviation ?50 Cost$100,- Holding terms 25% croak time 4 weeks Target pedal service level95% z-value1.645 Safety depot Cashmere sweaters Service level * ? * ?( give way time) 1,645 * 50 * ?(4) Safety stock for Cashmere sweaters = 164,50 Cost Cash mere sweaters Holding constitute * safety stock 0,25 * $100,- * 164,5 Total holding be of Cashmere sweaters is $ 4.112,50 If cardinal compares the total holding cost of the Khaki pants ($2.467,50) and the Cashmere sweaters ($ 4.112,50), ane fuck conclude that the holding cost for the Cashmere sweaters are higher(prenominal) than the holding cost for the Khaki pants. For the reason that the inventory cost of Cashmere sweaters are high it is cardinal to distribute those sweaters by the online blood and distribute the pants by the retail stores.

b)How much Safety Inventory reduction can The Gap expect on moving each of the two products from the stores to the online channel? According to the case, we larn that the demand from ! one week to the next week is nonparasitic Khaki pants Standard deviation ? ?(1002* 900) = 3.000 Safety stock Service level * ? * ?( Lead time) 1,645 * 3000 * ?(4) Safety stock is 9.870 Cost Holding cost * safety stock 0,25 * $30,- * 9.870 Holding cost are $ 74.025,- The holding costs for retail distribution are: $2.467,50 * 900 = $ 2.200.750,- Cashmere sweaters Standard deviation ? ?(502* 900) = 1.500 Safety... If you involve to get a plenteous essay, order it on our website: OrderEssay.net

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