Supply Chain Management-Homework 2 罗岩-1120329046-B1203292 1.How can the firm cope with huge variability in customer demand? The most important step is to reduce the lead time,so that customer can get the product quickly after placing an order.Although demand changes from month to month,we can improve predicting by data aggregation.Aggregate customers into larger groups,which can balance the variability and forecast customer demand more accurately. 2.What is the relationship between service and inventory level? If the service level is low,orders are not delivered on time,the inventory level will be high and the cost will be high.If the service level is high,orders are delivered on time,the inventory level will be low and the cost will be low. 3.What is the impact of lead time and lead time variability on inventory level? If lead time in the supply chain is reduced,transportation costs are certainly going to increase,but service level will increase,more orders will come,the inventory level will be low,and the cost on inventory can be reduced. 4.What an effective inventory management policy can you give to the firm? First,lead time needs to be reduced,perhaps by using air carriers. Second,because demand changes from month to month,we can forecast the demand monthly by using the data of the same month of last several years. Third,since the large number of SKUs are handled by JAM USA,a higher priority should be given to JAM USA
Supply Chain Management - Homework 2 罗岩 – 1120329046 - B1203292 1. How can the firm cope with huge variability in customer demand? The most important step is to reduce the lead time, so that customer can get the product quickly after placing an order. Although demand changes from month to month, we can improve predicting by data aggregation. Aggregate customers into larger groups, which can balance the variability and forecast customer demand more accurately. 2. What is the relationship between service and inventory level? If the service level is low, orders are not delivered on time, the inventory level will be high and the cost will be high. If the service level is high, orders are delivered on time, the inventory level will be low and the cost will be low. 3. What is the impact of lead time and lead time variability on inventory level？ If lead time in the supply chain is reduced, transportation costs are certainly going to increase, but service level will increase, more orders will come, the inventory level will be low, and the cost on inventory can be reduced. 4. What an effective inventory management policy can you give to the firm？ First, lead time needs to be reduced, perhaps by using air carriers. Second, because demand changes from month to month, we can forecast the demand monthly by using the data of the same month of last several years. Third, since the large number of SKUs are handled by JAM USA, a higher priority should be given to JAM USA