Impact of product complexity on inventory levels

In this thesis we consider a manufacturing and distribution supply chain of a roll-based product whose width comes in 1-cm increments. We formulate a computer model subject to stochastic, inelastic demand to determine the relationship between width interval and finished goods inventory levels. Assuming that the supply chain operates with the same set of policies regardless of the width interval value, we illustrate that the value of risk pooling diminishes as the interval widens. Due to the presence of a counteracting effect, we also demonstrate that increasing the width interval does not always reduce the amount of inventory requirements. Lastly, we show that the supply chain can operate with lower inventory levels without compromising the service level by pushing the inventory down the chain.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Authors dc:creator

• See, Ying-Lai
• Namkoong, Jin

Advisor dc:contributor.advisor

• Chris Caplice.

• Engineering Systems Division.

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/1721.1/35535

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/35535