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LM.53 In an effort to reduce costs, many regional power companies want to lower their safety stock of electricity transformers. To support this desire, a large transformer OEM will store safety stock of transformers in a FedEx warehouse in Memphis, Tennessee in order to insure quick air delivery to any of these is power companies should the need arise. This collaboration will result in lower overall inventory across the supply chain, making it possible for all parties to lower their costs. The OEM has signed up 8 power companies on this rapid replenishment program. On average, each of these power companies used to hold 33 transformers in their safety stock. In total, how many transformers would these companies hold? (Display your answer as a whole number.) 264 To maintain the same service level after this transition, how many units (transformers) would the OEM need to hold (or pool) in the FedEx warehouse? (Display your answer as a whole number.) After making this change for these power companies and OEM, by how many units (transformers) will inventory go down? (Display your answer as a whole number.) Number By what percentage would their inventory decrease by consolidating their inventory from the dealerships into the warehouse? (Write your answer as a percentage and display your answer to the nearest whole number.) %

LM.53 In an effort to reduce costs, many regional power companies want to lower their safety stock of electricity transformers. To support this desire, a large transformer OEM will store safety stock of transformers in a FedEx warehouse in Memphis, Tennessee in order to insure quick air delivery to any of these is power companies should the need arise. This collaboration will result in lower overall inventory across the supply chain, making it possible for all parties to lower their costs. The OEM has signed up 8 power companies on this rapid replenishment program. On average, each of these power companies used to hold 33 transformers in their safety stock. In total, how many transformers would these companies hold? (Display your answer as a whole number.) 264 To maintain the same service level after this transition, how many units (transformers) would the OEM need to hold (or pool) in the FedEx warehouse? (Display your answer as a whole number.) After making this change for these power companies and OEM, by how many units (transformers) will inventory go down? (Display your answer as a whole number.) Number By what percentage would their inventory decrease by consolidating their inventory from the dealerships into the warehouse? (Write your answer as a percentage and display your answer to the nearest whole number.) %

Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
Section: Chapter Questions
Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...
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LM.53 In an effort to reduce costs, many regional power companies want to lower their safety stock of electricity transformers. To support this desire, a large transformer OEM will store safety stock of transformers in a FedEx warehouse in Memphis, Tennessee in order to insure quick air delivery to any of these is power companies should the need arise. This collaboration will result in lower overall inventory across the supply chain, making it possible for all parties to lower their costs. The OEM has signed up 8 power companies on this rapid replenishment program. On average, each of these power companies used to hold 33 transformers in their safety stock. In total, how many transformers would these companies hold? (Display your answer as a whole number.) 264 To maintain the same service level after this transition, how many units (transformers) would the OEM need to hold (or pool) in the FedEx warehouse? (Display your answer as a whole number.) After making this change for these power companies and OEM, by how many units (transformers) will inventory go down? (Display your answer as a whole number.) Number By what percentage would their inventory decrease by consolidating their inventory from the dealerships into the warehouse? (Write your answer as a percentage and display your answer to the nearest whole number.)
Transcribed Image Text:LM.53 In an effort to reduce costs, many regional power companies want to lower their safety stock of electricity transformers. To support this desire, a large transformer OEM will store safety stock of transformers in a FedEx warehouse in Memphis, Tennessee in order to insure quick air delivery to any of these is power companies should the need arise. This collaboration will result in lower overall inventory across the supply chain, making it possible for all parties to lower their costs. The OEM has signed up 8 power companies on this rapid replenishment program. On average, each of these power companies used to hold 33 transformers in their safety stock. In total, how many transformers would these companies hold? (Display your answer as a whole number.) 264 To maintain the same service level after this transition, how many units (transformers) would the OEM need to hold (or pool) in the FedEx warehouse? (Display your answer as a whole number.) After making this change for these power companies and OEM, by how many units (transformers) will inventory go down? (Display your answer as a whole number.) Number By what percentage would their inventory decrease by consolidating their inventory from the dealerships into the warehouse? (Write your answer as a percentage and display your answer to the nearest whole number.)
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