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Week 2: Customer Demand & Inventory - Assignment Example

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However, with the past documented records on the instances where the customer demand varies then such a firm can make use of the lead time and avail the necessary products as well as material for the…
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Week 2: Customer Demand & Inventory
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Download file to see previous pages In this case, if the information is shared between the firm stakeholders then variability in the customers demand can be dealt with appropriately (Simchi-Levi, Kaminsky & Simchi-Levi, 2003).
In most cases, the higher the inventory level, the more likely for a firm to preserve advanced service levels. This was used in the past inventory management techniques. However, the current techniques used in the inventory management make it possible for a firm to increase its service levels while at the same time having a little or no influence on its service levels.
The unpredictability in demand augments so does the regular lead time, as well as, the inconsistency of lead time increases. Higher lead time variance causes the inventory levels to increase depending with the given service level. In addition, the longer the lead time the higher the increase in the inventory levels. The length of the lead time is also influenced by the customer variability demand, and this will effectively raise the inventory ...Download file to see next pagesRead More
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