1. OMSAN LOJİSTİK

2. Customer Service / Fill Rate Planning Inventory Planning and Management Latin America Logistics Center Logistics Management Series -

3. Fill Rate Planning Fill Rate Forecasting EOQ Replenishment Positioning Inventory

4. Segmentation of the Logistics and Inventory Planning Strategy

5. What Customers Want?

6. Fill Rate Planning Optimum Fill Rate vs. Actual Fill Rate Customer Satisfaction Computer Assisted Fill Rate Planning Case Studies

7. Definition Fill Rate Inventory Fill Rate is the Definition and Planning of the Product Availability to Satisfy Customer Orders Fill Rate should be defined by: –Product Type –Customer Type –Channel –Method of Evaluation

8. Optimum Customer Service Level / Fill Rate $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 50.000%60.000%65.000%70.000%75.000%80.000%85.000%90.000%92.500%95.000%97.000%98.000%99.000%99.500%99.700%99.950% Customer Service Level Measured as Fill Rate Inventory Carrying Cost Lost Sales Cost Total Policy Cost

9. Total Inventory Cost vs. Fill Rate TIC = Lost Sales Cost + Inventory Carrying Cost = LSC + ICC LSC = Unsatisfied Demand x Unit Price x Scarcity Factor = AD x (1-FR) x UP x SF ICC = Average Inventory Level x Unit Inventory Value x Inventory Carrying Rate = AIL x UIV x ICR

10. Total Cost of the Inventory Policy Annual Demand AD % Unsatisfied Demand (1-ufr) Unit Sales Price USP Scarcity Factor SF Lost Sales Cost LSC = f(ufr) Purchase Order Cost POC Annual Demand AD 1/Unit Inventory Value. 1/UIV 1/Inventory Carrying Rate. 1/ICR Economic Order Quantity (half) EOQ/2 Lead Time L Unit Fill Rate ufr Forecast Error e Safety Stock SS Average Inventory Level AIL Unit Inventory Value UIV Average Inventory Value AIV Inventory Carrying Rate ICR Inventory Carrying Cost ICC = f(ufr) Total Policy Cost TPC = f(ufr) + x x x x x EOQ = [(2*AD*POC)/(ICR*UIV)] 1/2 SS = f(e, ufr, L) +

11. Optimum Fill Rate Planning Parameters Inventory Carrying Rate (ICR) Purchase Order Cost (POC) Scarcity Factor (SF) Unit Sales Price (USP) Unit Inventory Value (UIV) Lead Time (L) Annual Demand (AD) Forecast Error (e)

12. Expected Outcome Optimum Fill Rate Optimum Inventory Turnover Efficient Order Quantities Outcomes Segmentation –By Product/segment –By Customer/segment

13. Parameters Inventory Carrying Cost

14. Parameters By Product Type

15. Outcome Economic / Efficient Order Quantity

16. Outcome Average Inventory Value vs. Turns

17. Outcome Fill Rate Optimization

18. What Fill Rate? SCENARIO 1 Part Ordered Received A1,000 990 B2,000 1,990 C4,000 3,990 D2,000 1,990 E1,000 990 Total 10,000 9,950 Line Fill Rate 0.0% Order Fill Rate 99.5% SCENARIO 2 SCENARIO 2 PartOrderedReceived A 1,000 1,000 B 2,000 2,000 C 4,000 0 D 2,000 2,000 E 1,000 1,000 Total 10,000 6,000 Line Fill Rate 80% Order Fill Rate 60%

19. Fill Rate by Product PART FILL RATE PART VALUE ($) INVENTORY ($) 95% $1,054 $50 $1,384 $500 98% 0% $1,216 $50 $0 $500 FILL RATE Same FILL RATE Product Service Level Probality of being in the order* 95% 97%3% * Frequency that the part is needed Keyboard PC CPU 95% 97%3% Different FILL RATE Keyboard PC CPU

20. Order versus Product: Fill Rate? Define: Pij = Probability that product j is required in order i  i = Proportion of orders i completed on time  j = Fill Rate product j              j jij P i 11 

22. Modeling Fill Rate Recommendations

23. Model vs. Current Fill Rate By Category

24. The model results suggest an opportunist to save over $9.5 million in annual inventory carrying cost and reduce the on-hand inventory by up to $22 million. On-Hand Inventory Model vs. Current

25. Model vs. Current – DC On-Hand Inventory

26. Model vs. Current Service Stock

27. Model vs. Current Direct Sales Inventory Turns

28. Model vs. Current Service Stock Turns

29. Model vs. Current Inventory Turns per Category

30. Inventory Model Analysis

31. Recommendations from a Model of Fill Rate Planning

33. Inventory Equilibrium Exercise using the Fill Rate Planner ®