Explain how a leader in operations could use the following two charts to develop and execute inventory strategy: https://d2vlcm61l7u1fs.cloudfront.net/media%2Feb1%2Feb181a4e-b7c9-40a9-8ecc-60ec3875af5f%2FphpJQoLE8.png https://d2vlcm61l7u1fs.cloudfront.net/media%2F7c8%2F7c8b5de5-f1cb-4a15-b406-ca8e29ac9cd2%2FphpLSUfz0.png Drive Optimal Inventory and Response $800,000 9 $600,000 E $400,000 Current 40 orders/3months ’40 80 160 80% 8 $200,000 ies 65 85% 90% 95% 100% Fill Rate Tie Cl efforts directly to financial and customer results.

Explain how a leader in operations could use the following two charts to develop and execute inventory strategy:

https://d2vlcm61l7u1fs.cloudfront.net/media%2Feb1%2Feb181a4e-b7c9-40a9-8ecc-60ec3875af5f%2FphpJQoLE8.png

https://d2vlcm61l7u1fs.cloudfront.net/media%2F7c8%2F7c8b5de5-f1cb-4a15-b406-ca8e29ac9cd2%2FphpLSUfz0.png

Drive Optimal Inventory and Response $800,000 9 $600,000 E $400,000 Current 40 orders/3months ’40 80 160 80% 8 $200,000 ies 65 85% 90% 95% 100% Fill Rate Tie Cl efforts directly to financial and customer results.

 

Solution

From the first chart, we can say that at lower values of fill rate, the lower reorder size (i.e. more frequent reorders) yields lower inventory holding

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