Cost of stockouts in the microprocessor business and its impact in determining the optimal service level/

In order to develop optimal inventory policies, it is essential to know the consequences of stockouts and the costs related to each kind of stockout; at Intel, however, such costs have not yet been quantified. The primary goal of this internship is to quantify the cost of stockouts, focusing in the microprocessor business. The first stage of this thesis consists of describing the different consequences of stockouts. In a stockout situation, customers may opt to buy alternate products at either higher or lower price (buy up or buy down), postpone the purchase until the product is available (postponed sales), buy the product from a non-authorized distributor (sales lost to the open market) or buy a non-Intel product (sales lost to the competition). Each of those consequences has a different financial impact, so we quantify stockout cost for different stockout situations and different service levels. This analysis is conducted at an aggregated level and also by product line. The results of this project show that stockouts have a high financial impact in the microprocessor business.

Department dc:contributor.department

Leaders for Manufacturing Program at MIT

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2005

Author dc:creator

• Sonnet, Maria Claudia

Advisor dc:contributor.advisor

• Stanley B. Gershwin and Donald B. Rosenfield.

• Sloan School of Management.
• Mechanical Engineering.
• Leaders for Manufacturing Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/34863

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/34863