1. Global SCM Optimize monthly inventory level of central warehouse, consider previous month demand 200883471 SONG YUN HO 2008.11.11 Term paper progress

2. Global SCM INTRODUCTION Optimize monthly inventory level of central warehouse, consider previous month demand  Well made inventory plan can be reduce inventory cost  In the One product inventory model, If each retailer shares one warehouse, It means that reduce cost more than distributed warehouse  Optimize inventory level of central warehouse can be change every month or season  This study want to decide Optimize monthly inventory level of central warehouse, consider previous month demand

3. Plant & Central warehouse Retailer 3 Retailer 4 Retailer 1 Retailer 2 Retailer 5  Optimize central warehouse inventory level  Consider previous month demand Global SCM Problem Optimize monthly inventory level of central warehouse, consider previous month demand

4. Global SCM How to decide optimal inventory level of central warehouse Service level Daily demand Safety stock level Reorder point Maximum capacity of warehouse Order amount Survey inventory level Demand during lead time Lead time Optimize monthly inventory level of central warehouse, consider previous month demand Central warehouse Stock out Stock in Optimal Inventory level ?

5. Global SCM Assumption Optimize monthly inventory level of central warehouse, consider previous month demand  Each retailer have safety inventory level during lead time  Each retailer follows (s,S) policy  Each retailer lead time already defined  We know previous month demand data  Plant & warehouse are located at same place Define Parameter D = Demand per day L = lead time T = Cycle time C = Maximum capacity s= Lead Time x AVGD S= Maximum capacity of warehouse AVGD= average daily demand

6. Global SCM Mathematical model Optimize monthly inventory level of central warehouse, consider previous month demand N = Number of retailer M = Number of day during One cycle D i = daily demand per r retailer (i ∈ 1, 2, · · 30, r ∈ 1, 2, · · 5) R i = retailer (i ∈ 1, 2, · · 5) D pmt r = demand during one cycle time per r retailer

7. retailer1retailer2retailer3retailer4retailer5 Demand Per day(D) Ran. Between (80,170) Ran. Between (60,120) Ran. Between (20,90) Ran. Between (60,140) Ran. Between (50,120) Lead time(L) 32134 Cycle time(T) Capacity(C)20001500300020001500 AVGD= average daily demand Global SCM Optimize monthly inventory level of central warehouse, consider previous month demand Generate historical data

8. Demand DayRetailer1Retailer2Retailer3Retailer4Retailer5 11241063611991 21459360136102 39675598997 41296583103107 5164107566494 697106828472 7101115209185 8123120666179 9941083376117 101081155511877 1110311955108115 121291055761120 131649245101102 1413360888473 15109112768360 1699104466598 1710466277978 1811076347469 1988677698114 2013366619754 21991025368111 22117114256672 2312298329689 24120119278986 25118115737673 2613278886077 2711874648699 281411095799103 29901016212879 30166865512466 avg,119.295.766755.033389.433388.6333 retailer1retailer2retailer3retailer4retailer5 D 119.295.85589.489.6 L 32134 T 16.815.754.522.416.7 C 20001500300020001500 D = Demand per day, L = lead time, T = Cycle time, C = Maximum capacity Global SCM Example Optimize monthly inventory level of central warehouse, consider previous month demand

9. Global SCM Further Research Optimize monthly inventory level of central warehouse, consider previous month demand  Define problem more clearly  Make mathematical model  Find optimal value by solver

10. Global SCM Thank You!! Optimize monthly inventory level of central warehouse, consider previous month demand