uncertainty and safety stock


  • safety stock : amount of inventory carried  in addition to expected demand and supplies 
  • many other inventory models 
    • price break models ( quantity discount model 
    • abc model 
    • single period model ( flu shots) 
    • fixed order quantity system ( every time you buy something is the same amount) 
    • fixed time period system 
    • stock outs: back order/lost sale ( 3x. every 99th person gets it )
  •  RFID 
    • automates the supply chain 
      • inventory management - goods automatically counted and logged as they enter the supply warehouse 
      • manufacturing - assembly instructions encoded on RFID tag provide information to computer controlled assembly devices 
      • distribution center - shipment leaving DC automatically updates ERP to trigger a replenishment order and notify customer for delivery tracking 
      • retail store - no check out lines as scanners link RFID tagged goods in shopping cart with buyer credit card 

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