Book: Supply Chain Management By Sunil Chopra and Petter Mendal 6th ed
Throughout Unit 2, each group will explore the case “Managing Inventories at ALKO Inc.” on pages 354-355. Taking on Gary Fisher’s role, review the information provided in the case and analyze the data to answer the following questions:
What is the annual inventory and distribution cost of the current distribution system?
What are the savings that would result from following the task force recommendation and setting up an NDC?
Evaluate the savings as the correlation coefficient of demand in any pair of regions varies from 0 to 0.5 to 1.0.
Do you recommend setting up an NDC?
Suggest other options that Gary should consider.
Evaluate each option and recommend a distribution system for ALKO that would be the most profitable.
How dependent is your recommendation on the correlation coefficient of demand across different regions?