![]() Safety Stock with EOQ (Economic Order Quantity) ![]() The distribution of your products’ lead times looks like this:īecause most of the time you cannot predict when those issues happen, you need safety stock to cover supply uncertainties. Then, your lead times highly varies, with some deliveries arriving early and others arriving much later than your average lead times. You have different supply hazards: missing raw materials, higher production lead times than expected, natural disaster, third-party transportation problems, customs clearance delays, customer demand, or even IT issues. Let’s take the following supply chain example: you produce in China and you deliver in France, with an average lead times of 40 days.
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