Amount of

= inventory

|
 |

 
   
 
 Consumer

 
 


This is the @%*$! ow! 6! mm Last Custome 
 buy 2´

time to 250 pcs The period, he rs ike this
make this year demand ordered 1 mode
money Let
s compared seems to pc Now, its better
make 450! to 80 ast be 4 pcs order 2
e wi buy year increasing Maybe more The
it a´ Business
d better demand is bugger
is make 12 up better (distributo
booming for him ! order 6 r) never
e wi No, wait, That suppies
take 350
 make 12 a@##$# on time´
for each never
distributor deivers on
time´
 Amount of
= inventory

|
 |

No new

    
 
 customer

 


50 in There are amn !!

e (T1 sppr) e
stock !?!? two pcs No one
s
is not going (manufactu
here did ying That picking up
to pick up ba rer) orders
my idiot these two
367 pcs ?!? 250 and
cacuatio (retaier) is pieces´

m finished´ now he
ns go taking is
wants to
wrong ?´ not taking
pick up
them
ony 83 !!
because
Curse that
he aready
a@#$#@ !!
has two´
And curse
me for
making
100 extra´
Q.what are the two causes of increased inventory levels ?

A. the 2 causes are

1. lack of reliability of manufacturer to supply the
distributor on time (³That a@##$# never delivers on
time´) and lack of reliability of the distributor to supply
the retailer (³The bugger never supplies on time´)
2. unprofessional demand-forecasting by the
manufacturer (³I¶ll make 12 for each distributor´), tier1-
supplier (³He will take 350´) and tier2-supplier (³Let¶s
make 450! He will buy it all´). actually, they made
assumptions instead of using a forecasting model
based on facts.