【正文】 ce up to S. 162。 RevenueSharing ContractslThe buyer shares some of its revenue with the seller, in return for a discount on the wholesale priceManufacturer Manufacturer DC Retail DCStoresFixed Production Cost =$100,000Variable Production Cost=$35Selling Price=$125Salvage Value=$20Wholesale Price =$?? Supply Contracts (between manufacturer’s wholesale price and retailer)What does wholesale price drive?How can manufacturer benefit from lower price?Retailer Profit (Wholesale Price $70, Retailers back 15% to manufacturer )Retailer Profit (Wholesale Price $70, RS 15%)$504,325Manufacturer Profit (Wholesale Price $70, RS 15%)Manufacturer Profit (Wholesale Price $70, RS 15%)$481,375Supply ContractsWholesale Price $70, RS 15%Supply Contracts162。 Even if Blockbuster keeps only half of the rental ine, the breakeven point is 6 rental per copy162。 Longterm Contractsl Also called forward or fixed mitment contracts, these contracts specify a fixed amount of supply to be delivered at some point in the future. The supplier and the buyer agrees on both the price and quantity to be delivered to the buyer.162。 Balance fixed costs and holding costsReminder: The Normal DistributionAverage = 30Standard Deviation = 5Standard Deviation = 10The MultiPeriod Continuous Review Inventory Model162。 The reorder point is a function of:l The Lead Timel Average demandl Demand variabilityl Service level Notation162。 The reorder point (s) has two ponents:l To account for average demand during lead time:LT?AVGl To account for deviations from average (we call this safety stock)z ? STD ? ?LTwhere z is chosen from statistical tables to ensure that the probability of stockouts during leadtime is 100%SL . 162。 Orderupto level thus equals:l Reorder Point + Q = 176+679 = 855 Periodic Review162。 Consider these two systems: Some problems faced by ACME, a pany that produces and distributes electronic equipment in the Northeast of the United States.(1)The current distribution system partitions the Northeast into two markets, each of which has a single warehouse. Retailers receive items directly from the warehouses。The tables include weekly demand information for each product for the last eight weeks in each market area. Observe that Product B is a slowmoving product –the demand for Product B is fairly small relative to the demand for Product A.Risk Pooling ExampleTable 2 Summary of Historical DataProduct Average DemandStandard Deviation DemandCoefficient of VariationMarket1 A Market1 B Market2 A Market2 B Total A Total B Risk Pooling ExampleTable 3 Inventory LevelsProductAVG DSafety StockReorder pointQ Orderup to levelMarket1A 65 132 197Market1B 4 25 29Market2A 62 131 193Market2B 3 5 24 29Total A 118 186 304Total B 6 33 39Risk Pooling:Important Observations162。 What are the tradeoffs that we need to consider in paring centralized distribution systems with decentralized distribution systems?162。 Periodic inventory reviews162。 Inventory turns increased by 30% from 1995 to 1998162。 OthersFactors that Drive Inventory Turns Increase162。 Recall the three rules162。 Market testingl Focus groups assembled.l Responses tested.l Extrapolations to rest of market made.162。 How important is the past in estimating the future?162。 What is the purpose of the forecast?l Gross or detailed estimates?162。 Delphi methodl Each member surveyedl Opinions are piledl Each member is given the opportunity to change his opinionMarket Research Methods162。 Reduction in SKU (%)162。 Use of sophisticated inventory management software (6%)162。 Quantitative approachesChanges In Inventory Turnover162。 Question: How much inventory should management keep at each location?162。 Risk Pooling Across Products162。 What are the factors that affect these answers? Risk Pooling Example (cont’)162。 Coefficient of variationl Coefficient of variation= Standard deviation/Average demand162。 Reorder point is thus 175, or about weeks of supply at warehouse and in the pipelineWhat is Reorder point? what is the orderuptolevel?Example, Cont.162。 SL = service level (for example, 95%). This implies that the probability of stocking out is 100%SL (for example, 5%)162。 Intuitively, how will this effect our policy?A View of (s, S) PolicyTimeInventory LevelSs0LeadTimeInventory PositionThe (s,S) Policy162。 Satisfy demand during lead time162。 Capacity reservation contractslManufacturer pays to reserve a certain level of capacity with the supplier.162。 Retailers cannot justify purchasing enough to cover the peak demandl In 1998, 20% of surveyed customers reported that they could not rent the movie they wanted Supply Contracts: Case Study162。 Supply Chain Profit is $910,000–Is there anything that the distributor and manufacturer can do to increase the profit of both?Supply Contracts162。 For some starting inventory levels, it is better to not start production162。 Question: If there are 5000 units remaining, what should SnowTime do? What should they do if there are 10,000 remaining?Initial Inventory and ProfitInitial Inventory and ProfitInitial Inventory and ProfitIf the manufacturer does not produce any additional suits, no more than 5,000 units can be sold and no additional fixed cost will be incurred. However, it the manufacturer decides to produce, a fixed productio