Different suppliers of a critical material

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Reference no: EM13971022

Given the following historical data on 2 different suppliers of a critical material that your company requires, which of the two suppliers (supplier 1 OR supplier 2) will minimize your required safety stock? Show and describe your analysis! [Base your analysis only on the supplied data provided and assume "all else is equal" between the 2 suppliers. In other words, cost per unit, quality, TCO, etc. do not need to be considered. Do not concern yourself with any other issues or data other than that which is given below.]

For any given period, your company's goal is to have required materials available in inventory 99.9% of the time.

Your mean requirement (demand) per day: 700 units.

Standard deviation of your daily requirement: 65 units.

Supplier 1

Mean lead-time: 7 days

Standard deviation of lead-time: 1 day

Supplier 2

Mean lead-time: 5 days

Standard deviation of lead-time: 2 days

Support your decision with reasoning and calculations in Excel.

Reference no: EM13971022

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