【正文】 globally. Effective supply chain management is still necessary to achieve globally optimal operations. Question 6 The sources of uncertainty in this example include: 1. Factors such as weather conditions, diseases, natural disasters cause uncertainty in availability of raw materials, ., peach crop. 2. Uncertain lead times during transportation of crop from the 222。rm to take advantage of risk pooling in order to increase service levels and decrease inventory levels and costs. However, outbound transportation cost is typically higher, and delivery lead times are longer. On the other hand, by building a larger number of warehouses closer to the end customers, a 222。exibility: 1. A truckload carrier is better if delivering bulky items or small items in large and stable quantities from warehouses to demand points (stores). A good example is the delivery of groceries from warehouses to supermarkets. Note that in this case we would like the demand to be in increments of full truck loads. 2. A package delivery 222。exibility by different modes of transportation depending on the needs of the individual customers. Question 9 1. High inventory levels i. Advantages: High 222。llment. ii. Disadvantages: High opportunity cost of capital tied in inventory, danger of price declines over time and obsolescence, need for more warehouse space. 2. Low inventory levels i. Advantages: Low inventory holding and warehousing costs. ii. Disadvantages: Higher risk of shortages and lower service levels. 5 Case Discussion Questions — Meditech Surgical Question 1 Meditech experiences poor service levels for new products, and inventory levels higher than necessary for all products. Question 2 There are many causes for these problems: 1. Demand is not studied in detail. 2. Information systems that record and monitor demand and inventory are poorly designed. 3. Forecasting errors are not tracked. 4. There is a tendency to shift the blame to the customers, ., panic ordering. 5. There are builtin delays and monthly buckets in the planning system. 6. The planning system ampli222。 Meditech typically see endcustomer de mand. Question 3 The customer service manager is directly exposed to the plaints from the customers. Hence, he is in a good position to gauge the scope of the problems. Other managers do not face the customers, and they do not necessarily focus on their satisfaction. Question 4 1. Recognize that demand is predictable, and establish better forecasting systems and accountability for forecasts. 2. Institute better planning systems to eliminate planning delays。guration is still satisfactory given the new operating environment. For instance, service level requirements may change due to increased petition which typically means that the lead time to ful222。rm to redesign its logistic work and build new warehouses that are closer to the end customers. Question 2 The design of the logistics work is a strategic decision that has long lasting effects and impacts all functions within the pany. For the success of such a project, many levels of the anization must be involved: 1. Upper Management: The new design must be aligned with the vision and strategic goals of the pany. Additionally, such a project may be costly, so management buyin is essential to ensure that sufficient resources are devoted to the project. 2. Sales and Marketing: Demand forecasts and anticipated changes in product design and offerings affect the work and need the involvement of sales and marketing teams. 3. Manufacturing and Operations: The logistics work design has obvious impact on day today operation of the 222。xed costs associated with warehousing. Fixed costs should be expressed as a function of warehouse capacity. viii. Fixed ordering costs, order frequencies and sizes by product or product family. 2. Data aggregation. Demand needs to be aggregated based on distribution patterns and/or product types. Replace aggregated demand data points by a single customer. 3. Mathematical model building. 4. Model validation based on existing work structure. 5. Selection of a few low cost alternatives based on the mathematical model. i. For the 222。c regulations, environmental factors, etc. ii. Optionally, build a detailed simulation model to evaluate these low cost candidate solutions. 6. Decide where to locate the centralized warehouse. With the centralized warehouse, service level will increase (less stockouts) and inven tory holding costs will decrease due to risk pooling. Also, 222。cant consideration is the ability to ship parts easily and ontime, ., the proximity to railroads, freeways, harbors, etc. In such a capital intensive industry, we would also expect that regulations such as tax breaks have an impact on potential warehouse locations. e. With a large customer base shopping for books online, short delivery lead times are crucial. Therefore, in book distribution, we would expect to 222。 and purchasing costs of equipment that are proportional to the daily output required from the material handling system, but in a nonlinear way because equipment is purchased in discrete quantities. 2. Fixed Costs i. Purchasing or rental cost of land. ii. Cost of maintaining and operating the warehouse building which includes annual depreciation and utility costs. iii. Cost of racks that depend on the capacity of the warehouse. iv. The cost of insurance for the facility. 3. Storage Costs i. Opportunity cost of capital tied up in inventory. ii. Cost of price declines while inventory is sitting in the warehouse. Note that this includes the risk of obsolete inventory that needs to be salvaged. Question 8 An exact optimization technique is guaranteed to provide an optimal solution (if one exists) even if it take