Wholesaler #4 Group Members: Koral Duygulu Robert Walters Alyse Nelson HW # 4 Supply Chain Simulation Exercise Analyses 1.) We had based our order and shipment strategy off of the status report information. For the order strategy we took in count of the amount of product on hand as well as what the current demand of the product and how much back order was present. We also had to keep in mind of how much product was due so we didn’t over order. As well as to decide how large of an order to place without leaving too much in inventory to get charged for, but still have no back order. Since there was double the charge for backorder then there was for inventory we tried to keep more on hand but found it very difficult to do so since the suppliers were not giving us all of the orders we placed and since demand for the product was very high at some points when we had a lot of backorders which also resulted also from the 4 period delay on receiving the products. The shipment strategy was much easier to calculate. We realized we were not able to ship more than the current demand for the product without there having to be backorder present. Knowing that we had no other choice but to ship what the demand for the product was out and wait on the orders to be received. We would ship everything on hand if the demand exceeded it just to minimize back order and lower the total cost. We did change our strategy toward the end of the exercise because we realized some of our orders were not being processed or only partially from the suppliers so we began to place much larger orders to try to get more from the suppliers and lower the backorders which we realized was the reason for most of the cost. Unfortunately the larger orders we placed started to come in as the demand fell to 0 which ultimately left us with excess inventory instead of backorder at the end of the exercise. 2.) –Robert— 3.) This simulation was quite difficult to understand at first. When reading over the instructions, even three times, then attempting to perform the tasks required it was still unclear of what was expected of us. Deciding what to order, keep on hand, and ship out was challenging; especially since we had to take into account how long it would take for the inventory to get to us and how much was going to be in demand. We had to make sure we were ordering enough without having too much on hand raising costs. I believe this is was there was a dramatic fluctuation in inventory. One period we would be in high demand with not enough inventory, then next period in no demand. This would change our opinions on how much inventory to order so we didn’t have too much. Then we would have a demand through the roof putting us on back order. When this would happen we would order a lot of inventory. We had to take into consideration that the orders wouldn’t come in for 4 periods and this would be hard for us to keep up. A better understanding of the simulation would have preventing some fluctuations, but mostly it comes from understanding the market you are in and the patterns of demand. As a wholesaler you need to keep in mind how long it takes to receive your inventory, and how much you should keep on hand to cover your current demand at any given time.
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