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Curriculum Gestionale
01 - Inventory Aggregation: Introduction 01bis - Inventory Aggregation or Square Root Law or Portfolio Effect 02 - A quick sketch of Inventory Aggregation 03 - The case considered 04 - Some notation 05 - Averaged value and standard deviation of multiple arrives 06 - Simple Scenarios 07 - Increasing n: using Bernouilli Trials 08 - Coefficient of Variance reduction with increasing n 09 - The role of Safety Stocks to face demand variation 10 - Results of Bernoulli Trials 11 - Big n, using Normal Approximation 12 - Inventory Aggregation Analysis for big n 13 - Conclusions
Details Written by stefano Category: Inventory Aggregation Example Published: 27 March 2014 Hits: 4270
Inventory Aggregation Example Exercise with Solution: Reducing the number of components and Inventory Management. The case of PC assembly (June 17th 2015 Test)
Portfolio Effect Square Root Law Inventory Pooling
Version 1.0 – March 2014 Author: Stefano SAETTA Dipartimento di Ingegneria Università di Perugia Copyrights reserved to Stefano SAETTA comments to
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The aim of this example is to give to the student an idea about the phenomen of Inventory aggregation. This phenomenon can be easily explained with probability theory, nevertheless is not always simple for the students to catch the behaviour of aggregated inventories. It is not always simple to understand why, when the number of inventories users increases (clients in the following), relative fluctuations of inventories demand deacreases and it is possible to save on inventories, while keeping a good service level. On the other hand inventory aggregation is a common phenomenon in a every day life.In grocery, for instance you can save on inventory when you have big shops. Also banks can reduce the available stock of money when the number of clients increases.Or electric power can be more efficiently used if you have a huge amount of clients. Healtcare services can reach higher utilization level if the population served can be increased and so on. Inventory aggregation is one of the main benefit in online shops. There of course conditions that must be verified in order to have Inventory Aggregation, first of all client demand must be independent (or better not correlated) from one client to the other. So in order to support my students to better understand this phenomenon I prepared a numerical example that will be described in the following. For an introduction to Inventory Aggregation, please refer to: Sunil Chopra, Peter Meindl, "Supply Chain Management, Strategy, Planning and Operation". Some elementary probability is required for the example, please refer to Feller: "An Introduction to Probability Theory and Its Applications" or other probability books for more informations. Next
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Inventory Aggregation Example
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01 - Inventory Aggregation: Introduction
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