Chapter 8. Maintaining Supply
Just as fulfillment delivers products to meet customer demand, so replenishment acquires the materials necessary to build those products. The replenishment cycle, shown in Figure 8.1, involves the same activities as the fulfillment cycle, but views them from the perspective of the customer rather than the supplier. Given this perspective, the chapter focuses on three key questions that drive purchasing decisions: when to place an order, how much to buy at a time, and how much inventory to keep on hand. The answer to the last question reveals a disturbing truth: There is no amount of inventory that will prevent stockouts, so setting inventory levels is basically a matter of risk management. The final section turns ...
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