Products stock-outs

D Plant shutdown Direct fines product stock-out >500... 

Example A commercial item is sold in a retail outlet as a unit product. In the past, sales have averaged 10 units per month with no seasonal variation. The retail outlet must order replacement items 2 months in advance. If the outlet starts the next 2-month period with 25 items on hand, what is the probabihty that it wih stock out before the end of the second month ... 

Inventory refers to the stock of products held to meet future demand. Pharmacies hold inventory to guard against fluctuations in demand, to take advantage of bulk discounts, and to withstand fluctuations in supply (e.g., late deliveries) (West, 2003). There are four costs associated with having inventory acquisition costs, procurement costs, carrying costs, and stock-out costs (Carroll, 1998 Huffman, 1996 Silbiger, 1999 Tootelian and Gaedeke, 1993 West, 2003). 

The base-stock control model relates to a queueing model as follows. Consider the case of demand in single units mentioned above. (Batch demand will be discussed below in Section 2.3.) Let each unit of demand correspond to a job arrived to the queue. Each unit of demand, on arrival, is supplied by the on-hand inventory or, in the stock-out situation, joins a back-order queue. Regardless, however, a replenishment/production order is triggered. 

It includes 18 buffers, 23 different types of chemicals, a total inventoiy level of approximately 5,000 items, and 10 replications of a production period of 7 months. The simulation study uses six performance measures to evaluate the overall performance of the two inventory models. These are defined as expired, normal use, ordered, stock-out, reallocated, and service level. Expired refers to the total number of TTSC that expire, which needs to be disposed of in an environmentally friendly manner. Normal use is the total number of time-sensitive materials that are available in designated buffers and are used in production. Ordered is the total number of time-sensitive materials ordered. Stock-out is the total number of TTSC requested by an operator but was not available in the buffer at the time of the demand. Reallocated is the total number of TTSC an operator obtains from an adjacent station. 

Reduction of unseen lost sales profit leaks. Reducing lost sales requires adequate supplies to meet demand. Products produce no profit if the sale is lost due to a stock-out. 

Demand exceeds the plan 130,000 units could have been sold, but only 100,000 were available. This results in lost sales of 30,000 units. Customers are disappointed, and sales are lost. The supply chain manager is fired because of the stock-outs and the product... 

Integrated software systems for matching shelf stock to expectations A software-based system that corrects shelf inventory levels based on actual product present (possible RFID solution). Identifies stock-outs from shrinkage or item misplacement. 6-Functional supply chain processes (source and make) X o o... 

A software-based system that corrects shelf inventory levels based on actual product present (possible RFIDsolution). Identifies stock-outs from shrinkage or item misplacement. 

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