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5 Reasons for inventory 1)Seasonal Economy of scale Nenu Shipment Armies Christmas e.g., transportation, 2)Seasonal to take adv. of Ha arrests quant. discounts 2. Seasonal in At 12345678910112131415161718192021 3. Cycle inventory 4. Decoupling inventory/buffers Cumulative 1,200 Safety Inventory at 5. Sat Inflow and vent Blood Bank Outflow Central DC giona Inventory HK Vend demand uncertainty - To mai Supply uncertainty Days of the Month5 Reasons for inventory 1. Pipeline inventory 2. Seasonal inventory 3. Cycle inventory 4. Decoupling inventory/buffers 5. Safety inventory 1) Seasonal demand Christmas, Chinese NY, etc. 2) Seasonal supply Harvests Economy of scale e.g., transportation, to take adv. of quant. discounts Central DC -> Regional DC -> Retailers HK Vendor -> US OEM (brand owner) =) To maintain independence of operations Demand uncertainty Supply uncertainty
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