Averge Inventory level at regional warehouses are raised

CIM team use ROP/EOQ models to replenish regional warehouses

Safety stock at regional warehouses = 1 month

Mfg Lead time = 1 to several months

Lumpy demand patterns

Purchasing holds regional orders until price break is achieved

Orders are released in supply chain

Purchasing negotiates for volume discounts

Time to order for Purchase dept = 1 month

Purchasing evaluated on cost reduction efforts with vendors

Flights are evaluated on inventory availability

Several Mn $ worth fuel cost incurred in excess

Avg 400 pounds of excess inventory

Flight attendants 'sqiurrel away' excess inventory

Best Airlines measures for superior service

BA has $15 Mn in-flight support inventory

Kitchens stock out in number of items

BA has to substitute items when required

Kitchens are regularly shorted on items ordered

Some kitchens dont understand this policy

CIM team sends the average demand

CIM teams expects kitchens to justify excess demand

Sometimes, orders are in excess of average demand

Kithen has the tendency to satisfy attendant request

Kitchens bargain away some items they need

Kitchen feels threatened by evaluation

Kitchens contact nearby kitchens to bargain items

Flight attendants believe they must provide superior service

Kitchens are written up for not filling up inventory above flight level

Kitchens are evaluated by flight attendants

BA provides quality through least cost and superior service

Each service truck carries excess of many items

BA expedites items to prevent stock outs

These trucks try to minimize trips to pick up area

CIM does not ship backorders

Kitchens 'squirrel away' excess inventory

Regional warehouses are evaluated on inventory investment

CIM team not informed of bargaining activities Some receipts from regional warehouses have several weeks inventory for some items

Some kitchens order some items in excess of average demand Kitchen Order quantities are rounded to next higher container size

Kitchens are evaluated by number of stock outs and customer service level

Kitchen order quantities are liberal

BA measures for least cost

Each service truck carry inventory for 5-6 flights

Service trucks are evaluated on their efficiency

Kitchens have > 2weeks of inventory

Regional warehouses sometimes refuse to accept excess inventory from kitchens

Kitchens order weekly

Kitchens use Minimax system (and not lot for lot system)

Open picking area holds 1.5 days of inventory