a) Consider a four link supply chain with the following data:
Link 1 - using rail - lead time range 3-5 days,
Link 2 - using water - lead time 16-22 days,
Link 3 - using rail - Lead time 6-9 days,
Link 4 - using truck lead time 2-4 days.
The material enters North America from overseas supplier at the end of link 2. Daily demand is 400 units with no demand uncertainty. Treat each range as a measure of 6 sigma variation. Use a service level of 0.99 and estimates safety stock to be carried by the customer.
b) Compare the in-transit inventory and the safety with another supplier who can supply by road with a lead time with a range of 1-2 days.
c) Select a measure of risk and estimate it for each of the two supply chains.