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Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 150 cartons per week for which Haley pays $15 per carton. Inbounds shipments from the vendor average 1,000 cartons with an average lead time of 3 weeks. Haley operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to 1 week. Further, they will be able to reduce shipments to 200 cartons. Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make to Haley’s average inventory level and its average aggregate inventory value?
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- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning