【導讀】iii.Marketing,etc.plastics,etc.tronicponents,etc.railroads,etc.holdingcosts.eachother.inmix.ductioncosts.capability.prices.relativelylowrisk,

　　

【正文】 n an order arrives, the expected inventory level is L ? AV G units less than the basestock level, ., is equal to r ? AV G + z ? STD ? √r + L. Question 7 Observe that the longer L1, the more time the system has before allocation of inventory to the retailers need to be made by the crossdock facility. Thus, the longer L1 the more the system can take advantage of the risk pooling concept. Hence, the total amount of inventory is smaller when the cross dock facility is closer to the retail outlet. Question 8 The answer is not immediately clear because the required safety stock depends both on the average and the variance of the lead time. The retailer would have to make a decision depending on the relative effects of these two factors. See Section . Also, your decision would ultimately depend on the requirements of the customers. 13 Question 9 For a mature product, it is reasonable to expect that the price and demand are stable in the short term. However, as the time horizon gets longer, and new products are in troduced into the market, the demand and price for this particular product decrease and excessive inventories may have to be written off. Thus, inventory holding costs related to obsolescence may be regarded as 222。xed in the short term, but not in the long term. Some storage costs are another example of inventory related costs 222。xed in the short term, but variable in the long term. For instance, due to large inventories a pany may have to rent multiple warehouses for a 222。xed lease term. However, if inventory policies are improved and turnover rates are increased in this period of time, then it may be possible to rent fewer warehouses when renewing the lease contracts. Clearly, similar arguments can be made for material handling equipment, storage racks, insurance, personnel, etc. Question 10 Such deterministic models can be used as proxies for the more realistic stochastic models if the planning horizon is short, and the parameters of the problem are expected to be relatively stable over this time frame. However, most importantly, simple models can illustrate the basic tradeoffs in a given type of problem which also translate into more realistic and plex situations. For instance, the optimal policy for the economic lot sizing model balances ordering and inventory holding costs which is a general insight for more sophisticated systems as well. Question 11 There are implicit and explicit penalties associated with a highly variable demand. For instance: 1. As discussed in Sections to , the level of safety stock is proportional to the variability in demand, ., the higher the variability in demand the higher the inventory holding costs. 2. From a perspective, highly variable demand means that utilization of equipment will greatly 223。uctuate, and equipment will sit idle when demand is low. 3. From a managerial perspective, high variability makes planning a very plex task that requires additional resources, sophisticated models and tools. On the other hand, if a pany is successful at implementing strategies to cope with high variability in demand, it may be possible to leverage on these to increase market share and/or revenue if the petitors are not as successful. Question 12 The factors that affect the choice of the supply contract type include the following: 1. Business convention: Companies tend to choose the contract form that is most mon in their type of business. 14 2. Information availability: The type of information available may dictate what type of contract can be implemented in practice. Depending on the contract type, suppliers and buyers require access to different types of information, and some information may be difficult for the supplier to acquire but easier for the retailer, or vice versa. 3. Decision making and incentives: To achieve the optimal pro222。t for the whole system and to allocate it properly, both suppliers and retailers must understand that decisions must be made collaboratively. All parties must be aware that they have to give up part of the control in their individual systems, and the choice of the supply contract type depends on the level of control that parties are willing to share with each other. 1. Buyback contracts: i. Advantages: (a) Commonly used in many businesses. (b) The coordinating prices are not very sensitive to the demand distribution. ii. Disadvantages: (a) The supplier may have to buy back a large quantity of the product when demand is low. (b) Extra transportation and restocking costs for returned items. 2. Revenuesharing contracts: 1. Advantages: (a) Easy to understand. (b) The optimal values of the decision variables are not very sensitive to the demand distribution. 2. Disadvantages: (a) Need to monitor the total revenue. 3. Quantity223。exible contracts: i. Advantages: (a) Commonly used in many businesses. ii. Disadvantages: (a) The optimal values of the decision variables are sensitive to the demand distri bution. (b) Extra transportation and restocking costs for returned items. 4. Salerebate contracts: i. Advantages: (a) It is a direct incentive to the retailer to increase sales. ii. Disadvantages: (a) Difficult to track and implement. 15 Question 13 Generally speaking, there is a lag between development of algorithms in the operations management literature and their adoption in business. There are several reasons for this: 1. Practitioners are not familiar with the literature. 2. It is hard to convince the industry that analytical models are useful. There is resistance to change. 3. Possible gaps between theory and practice. 4. There are practical problems in implementation. For instance, without the development of information technology, it would have