4. + + 56 Days 17 Days 2 Days = 75 Days 2 Days Shorten Lead-times to Reduce Inventory Fabrication Assembly DC Customers Canada Electronics Inc. PC Inc. Computek USA HD Supplier CM2 Supplier Japan Safety Stock levels will increase with lead-time
5. 2 Days Shorten Lead-times to Reduce Inventory Fabrication Assembly DC Customers Canada Electronics Inc. PC Inc. Computek USA HD Supplier CM2 Supplier Japan Safety Stock levels will increase with lead-time
6. $30 $45 $70 $90 Buffer With Less Expensive Inventory Fabrication Assembly DC Customers Canada Electronics Inc. PC Inc. Computek USA HD Supplier CM2 It is critical to set expectations on lead-time for order when postponing and pooling Supplier Japan
7. Inventory Pooling Gains the Advantage of Large Number Averages Calculate the variation in demand using the BOM and sourcing Fabrication Assembly Hubs DC Canada Electronics Inc. PC Inc. USA Computek HD Supplier Japan CM2 Supplier Less variation at common storage
8. Balancing All the MEIO Factors Total L/T 75 Days Component Assembly DC Hubs % Service Level $ Stock out Electronics Inc. Canada PC Inc. % Service Level $ Stock out Computek HD Supplier USA CM2 Supplier % Service Level $ Stock out Japan
9. Balancing All the MEIO Factors Total L/T 75 Days Component Assembly DC Hubs % Service Level $ Stock out Electronics Inc. Canada PC Inc. % Service Level $ Stock out Computek HD Supplier USA CM2 Supplier % Service Level $ Stock out Japan
10. Balancing All the MEIO Factors Total L/T 75 Days Component Assembly DC Hubs % Service Level $ Stock out Electronics Inc. Canada PC Inc. % Service Level $ Stock out Computek HD Supplier USA CM2 Supplier % Service Level $ Stock out Japan
![Better Service with Less Inventory Multi-Echelon Inventory Optimization considers the following when optimizing inventory targets Forecast error and Stock out costs Reducing Manufacturing and Distribution Lead Time Reducing Inventory Costs with Postponement Lowering Volatility with Inventory Pooling ,[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)