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ITEC ASSIGNMENT - Coursework Example

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The manager should not use the same optimal service level for all products because: the products have different purchasing prices, the products have different standard deviations, the products are used by different kind of people, the products have different salvage values,…
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Download file to see previous pages Toddler girl boot should be third as they fall under number three in profit generation.
Based on my analysis, some products that can less ordered. This enables the firm to incur less holding cost. This also helps to reduce the risk of selling the products at salvage value, which may lead to losses to the firm. The ordering of fewer products also helps to reduce the ordering cost. Less order make it possible to sell them out easily and this can enable the firm to order once ordering level reaches. Since the probability of the business incurring loss increases downwards, it is of great importance for the firm to place few orders.
Newsvendor model is useful when making a last decision of a product in its life cycle. This enables the manufacturers to buy in bulk of which when the stock is too large then they sell at salvage value.
Trietsch, Dan. Optimal Feeding Buffers for Projects or Batch Supply Chains by an Exact Generalization of the Newsvendor Model. Auckland, N.Z: Dept. of Information Systems and Operations Management, University of Auckland, 2004. ...Download file to see next pagesRead More
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