Hfhgfghh
Project Instructions:
Read and complete the following Application Case.
Spreadsheet Model-Based Decision Support for Inventory Target Setting at Procter & Gamble.
Procter & Gamble (P&G) is a large, diversified, multinational consumer products company. Its modeling and decision support group was asked to create global inventory models. P&G has needed “scientific” models to help it control its inventory since the mid-1980s when it implemented Distribution Requirements Planning (DRP). P&G needed an easy way to establish reliable safety stock levels at both the item and location levels. This safety stock is needed to allow for uncertainty in production during the time when replenishments would be delivered.
The original solution was created using Lotus 1-2-3, but over the years the company has developed a suite of global inventory models using Excel. When developing the spreadsheet models, the company kept two goals in mind: “educate supply chain planners on various types, roles and root causes of inventories in supply chains and provide a quick method for setting safety stock within a DRP framework.” The latest model, in addition to growing into a global inventory model, also provides a mechanism for the central support group to train users and assist those who have questions. The inventory components in the models include: cycle stocks, safety stocks, frozen stocks, and anticipation stocks.
Most of P&G’s models use a continuous review policy. Continuous review policy, as the name implies, means that inventory levels are monitored continually. When inventory goes below a set order point, the company reorders up to a set amount using and order quantity (number of items per unit) or a multiple of the order faces. Examples of these issues in the models include:
1. Modeling of normal and gamma distributions for demands or forecast errors.
2. Recognition of a two-tier distribution network: customers receive replenishments directly
Read and complete the following Application Case.
Spreadsheet Model-Based Decision Support for Inventory Target Setting at Procter & Gamble.
Procter & Gamble (P&G) is a large, diversified, multinational consumer products company. Its modeling and decision support group was asked to create global inventory models. P&G has needed “scientific” models to help it control its inventory since the mid-1980s when it implemented Distribution Requirements Planning (DRP). P&G needed an easy way to establish reliable safety stock levels at both the item and location levels. This safety stock is needed to allow for uncertainty in production during the time when replenishments would be delivered.
The original solution was created using Lotus 1-2-3, but over the years the company has developed a suite of global inventory models using Excel. When developing the spreadsheet models, the company kept two goals in mind: “educate supply chain planners on various types, roles and root causes of inventories in supply chains and provide a quick method for setting safety stock within a DRP framework.” The latest model, in addition to growing into a global inventory model, also provides a mechanism for the central support group to train users and assist those who have questions. The inventory components in the models include: cycle stocks, safety stocks, frozen stocks, and anticipation stocks.
Most of P&G’s models use a continuous review policy. Continuous review policy, as the name implies, means that inventory levels are monitored continually. When inventory goes below a set order point, the company reorders up to a set amount using and order quantity (number of items per unit) or a multiple of the order faces. Examples of these issues in the models include:
1. Modeling of normal and gamma distributions for demands or forecast errors.
2. Recognition of a two-tier distribution network: customers receive replenishments directly