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Thread: Need help with demand planning / inventory analysis (safety stocks, reordering, etc)

  1. #1
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    Question Need help with demand planning / inventory analysis (safety stocks, reordering, etc)

    Hi there! Getting stuck on a problem - could use the help.. this is about demand planning / safety stock type information. Can you tell me your assumptions? I tried using the safety stock formula but was having trouble because I don't have enough information...? Maybe I'm thinking of this the wrong way. Help would be appreciated!

    1) What is the recommended safety stock given the known lanyard data?
    2) What is the recommended minimum and maximum quantity threshold for reordering? Why?
    3) Assuming overseas pricing, how many more lanyards were sold last week vs the prior week?
    4) A cross-functional team alerts you that in 14 days there will be an event leading to a huge spike in orders, up to 85,000 lanyards per week for
    at least 3 weeks. Please validate when and how (overseas or domestic) the next orders should to be placed to cover the event,
    ensure zero out of stocks and maintain lowest costs
    Lanyard Data Set
    Initial On Hand Inv $ $ 168,025
    Cost per unit (domestic) $ 0.55
    Cost per unit (overseas) $ 0.95
    Domestic Lead Time 30 days
    Overseas Lead Time 90 days
    Average weekly sales growth 0.98%
    Last weeks sales $ $ 8,250
    Prior weeks sales $ 7,700
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  2. #2
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    Re: Need help with demand planning / inventory analysis (safety stocks, reordering, e

    Quote Originally Posted by tzengste View Post
    Hi there! Getting stuck on a problem - could use the help.. this is about demand planning / safety stock type information.
    Can you tell me your assumptions? I tried using the safety stock formula but was having trouble because I don't have
    enough information...? Maybe I'm thinking of this the wrong way. Help would be appreciated!

    1) What is the recommended safety stock given the known lanyard data?

    2) What is the recommended minimum and maximum quantity threshold for reordering? Why?

    3) Assuming overseas pricing, how many more lanyards were sold last week vs the prior week?

    4) A cross-functional team alerts you that in 14 days there will be an event leading to a huge
    spike in orders, up to 85,000 lanyards per week for at least 3 weeks.

    Please validate when and how (overseas or domestic) the next orders should to be placed to
    cover the event, ensure zero out of stocks and maintain lowest costs

    Lanyard Data Set
    Initial On Hand Inv $ $ 168,025
    Cost per unit (domestic) $ 0.55
    Cost per unit (overseas) $ 0.95
    Domestic Lead Time 30 days
    Overseas Lead Time 90 days
    Average weekly sales growth 0.98%
    Last weeks sales $ $ 8,250
    Prior weeks sales $ 7,700
    There's a whole lotta possible domestic/overseas combos, such as:
    17 * .55 + 176858 * .95 = 168025 = inventory

    Are you trying to find a particular one....like domestic : overseas = 65 : 35
    Last edited by DenisB; Sep 21st 2018 at 11:16 AM.
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  3. #3
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    Re: Need help with demand planning / inventory analysis (safety stocks, reordering, e

    Hey! So I used an assumption of 80% domestic, 20% overseas.
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  4. #4
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    Re: Need help with demand planning / inventory analysis (safety stocks, reordering, e

    Quote Originally Posted by tzengste View Post
    Hey! So I used an assumption of 80% domestic, 20% overseas.
    WHERE d'hell is that stated in the problem?

    .80*.55 + .20*.95 = .63 = cost

    Can anything else be changed in your problem, to simplify it?
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