Inventory Policy and Reorder Point Analysis

1. Inventory Policy and Reorder Point Analysis KELLEY BESSETTE JOHN JOHNSON JEFF LITCHFIELD MATT RISKIN

2. Branches/Demand Centers DC DC DC DC DC Component Rebuild Centre Finished Cores Old Cores Work in Process

3. Branch – a node in the network • Demand Centre – any node in the network with demand over a critical number (5) parts per year • These centres do carry inventory DC DC DC DC DC Finished Cores Old Cores CRC Work in Process

4. DC DC DC DC DC Branches/Demand Centers • Services the branches, and carries inventory for nodes with sales less than a critical value Finished Cores Old Cores CRC Work in Process

5. Branches/Demand Centers • This facility is located in Edmonton, and is responsible for refurbishing used cores DC DC DC DC DC Component Rebuild Centre CRC Finished Cores Old Cores Work in Process

6. Branches/Demand Centers DC DC DC DC DC Finished Cores Old Cores CRC Work in Process

7. Demand Centres Old Cores 45 Finished Cores CRC Work in Process

8. Old Cores • Simulation of demand • A variation of Croston's Intermittent Method 45 Finished Cores CRC Work in Process

9. Returning Cores • Assign return time • Update return time daily on a basis Old Cores 45 Finished Cores CRC Work in Process

10. Demand Centres Old Cores • Refurbishing • Assign processing time • Track cores in process 45 CRC Work in Process

11. Demand Centres Old Cores • Distribution • Where finished cores go • Lead Time • Track Cores en-route 45 Finished Cores CRC Work in Process

12. Outputs of Model • Where to locate inventory • Branch versus Distribution Centre • Re-order point at each demand centres/distribution centres • Number of cores in system

13. Model Run ResultsPart Number: 6V5227 Store Number: 10

14. Potential Savings and Improvements

15. Project Accomplishments • Development of a product that can be applied to 900 parts • Simulating time event in Excel • Model construction and implementation in a three month period

16. Questions?(Model Preview)