The Power of Prediction
Abstract:Quality in service parts management means availability without excess inventory. Low-volume demand can cause excess and obsolete inventory write-offs. Considerable work has been done in applying statistical inventory stocking models to the service parts situation. SUch statistical models allow for the determination of safety stock to load into the material requirements planning (MRP) system to achieve a targeted service level. Experience has shown, though, that the actual service level achieved consistently runs a few percentage points lower than that suggested by statistical theory. This is evidently because the statistical models have presumed that a supply order placed at the supplier lead time would always arrive on time. This is simply not reality. The article examines how the statistical models for the determination of safety stock can be expanded to incorporate supplier delivery …
Social Bookmarking
Digg, delicious, NewsVine, Furl, Google, StumbleUpon, BlogMarks, Facebook
You must log in to comment. Please log in or register. Comments FAQ
Average Rating

Out of 1 Ratings
Rate this article
Related Articles
Stock Options
Back to Basics: Sufficient Evidence
Chain Challenges
Featured advertisers
Very good article. Moved well through technical analysis and flowed well. Right level of detail and overview for this type of publication.
--JD Solomon, 06-07-2013