What can other members use? A methodology for estimating the cost of service levels.

1. 10 % Complete Modeling a Conversion of Suppliers from Prepaid to Collect (P2C) SystemResearch Team: Dr. Sarah Root (PI), Dr. Russell Meller, Prabuddha Lohani 0% 100% • Sponsor: Sam’s Club • Thrust Area: Distribution • Problem in context: • Sam’s is looking to move more of its suppliers from prepaid to collect. • Identify opportunities to reduce costs by moving to collect terms • The quantitative tradeoff between different level of service (4- day window, 5-day window ) and the cost is unknown. • Important/Expected Results: • Develop a model to estimate baseline inbound transportation cost increases as a result of P2C conversion. • Help in prioritizing the suppliers who should be converted from prepaid to collect. • Construct model to estimate the effect of MABD on transportation cost. • Validation of model, working toward a larger implementation. • Technical Approach: • Data collection and analysis • Formulation of strategy • Mathematical modeling of operational problems • Sensitivity analysis • Documentation • What can other members use? • A methodology for estimating the cost of service levels. • A model to prioritize and estimate supplier transportation cost, and savings that result from P2C conversion. • Recommendations showing potential ways to off set the cost increases with the benefits of controlling the inbound flow to bring efficiencies. Project # UA10 – Sam’s Club