Journal of Korean Institute of Industrial Engineers (대한산업공학회지)

Korean Institute of Industrial Engineers (대한산업공학회)
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Policy Safety Stock Cost Optimization : Xerox Consumable Supply Chain Case Study

정책적 안전재고의 비용 최적화 : 제록스 소모품 유통공급망 사례연구

  • Suh, Eun Suk (Seoul National University, Industrial Engineering Department)
  • 서은석 (서울대학교 산업공학과)
  • Received : 2015.02.18
  • Accepted : 2015.07.14
  • Published : 2015.10.15
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Abstract

Inventory, cost, and the level of service are three interrelated key metrics that most supply chain organizations are striving to optimize. One way to achieve this goal is to create a simulation model to conduct sensitivity analysis and optimization on several different supply chain policies that can be implemented in actual operation. In this paper, a case of Xerox global supply chain modeling and analysis to assess several "what if" scenarios for the consumable policy safety stock is presented. The simulation model, combined with analytical cost model and optimization module, is used to optimize the policy safety stock level to achieve the lowest total value chain cost. It was shown quantitatively that the policy safety stock can be reduced, but it is offset by the inbound premium transportation cost to expedite supplies in shortage, and the outbound premium transportation cost to send supplies to customers via express shipment, requiring fine balance.

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References

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