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Stanley B. Gershwin and Donald B. Rosenfield. Sonnet, Maria Claudia Leaders for Manufacturing Program. Leaders for Manufacturing Program at MIT Massachusetts Institute of Technology. Department of Mechanical Engineering Sloan School of Management 2006-11-08T16:51:25Z 2006-11-08T16:51:25Z 2005 2005 http://hdl.handle.net/1721.1/34863 63675580 Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering; in conjunction with the Leaders for Manufacturing Program at MIT, 2005. Includes bibliographical references (p. 66-67). In order to develop optimal inventory policies, it is essential to know the consequences of stockouts and the costs related to each kind of stockout; at Intel, however, such costs have not yet been quantified. The primary goal of this internship is to quantify the cost of stockouts, focusing in the microprocessor business. The first stage of this thesis consists of describing the different consequences of stockouts. In a stockout situation, customers may opt to buy alternate products at either higher or lower price (buy up or buy down), postpone the purchase until the product is available (postponed sales), buy the product from a non-authorized distributor (sales lost to the open market) or buy a non-Intel product (sales lost to the competition). Each of those consequences has a different financial impact, so we quantify stockout cost for different stockout situations and different service levels. This analysis is conducted at an aggregated level and also by product line. The results of this project show that stockouts have a high financial impact in the microprocessor business. (cont.) Due to the high margins, each sale lost to the competition means losing a significant dollar amount, which may easily out weigh the inventory related costs of that product. The result is service levels that are higher than Intel had believed would be appropriate. The quantification of the financial impact of the different stockout situations will be a valuable input into further supply chain optimization analysis including adjustment of finished good inventory levels. by Maria Claudia Sonnet. S.M. M.B.A. 67 p. 4356393 bytes 4359123 bytes application/pdf application/pdf eng Massachusetts Institute of Technology M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. http://dspace.mit.edu/handle/1721.1/7582 Sloan School of Management. Mechanical Engineering. Leaders for Manufacturing Program. Cost of stockouts in the microprocessor business and its impact in determining the optimal service level/ Thesis application/pdf false Publication unknown unknown <Publication xmlns="https://www.openaire.eu/cerif-profile/1.1/" id="4db57452-0d97-430f-8324-90f08a2337a5"> <Type xmlns="https://www.openaire.eu/cerif-profile/vocab/COAR_Publication_Types">http://purl.org/coar/resource_type/c_1843</Type> <Language>eng</Language> <Title>Cost of stockouts in the microprocessor business and its impact in determining the optimal service level/</Title> <PublishedIn> <Publication> </Publication> </PublishedIn> <PublicationDate>2005</PublicationDate> <Authors> <Author> <DisplayName>Sonnet, Maria Claudia</DisplayName> <Affiliation> <OrgUnit> </OrgUnit> </Affiliation> </Author> </Authors> <Editors> </Editors> <Publishers> <Publisher> <DisplayName>Massachusetts Institute of Technology</DisplayName> <OrgUnit /> </Publisher> </Publishers> <License>http://dspace.mit.edu/handle/1721.1/7582</License> <Keyword>Sloan School of Management.</Keyword> <Keyword>Mechanical Engineering.</Keyword> <Keyword>Leaders for Manufacturing Program.</Keyword> <Abstract>In order to develop optimal inventory policies, it is essential to know the consequences of stockouts and the costs related to each kind of stockout; at Intel, however, such costs have not yet been quantified. The primary goal of this internship is to quantify the cost of stockouts, focusing in the microprocessor business. The first stage of this thesis consists of describing the different consequences of stockouts. In a stockout situation, customers may opt to buy alternate products at either higher or lower price (buy up or buy down), postpone the purchase until the product is available (postponed sales), buy the product from a non-authorized distributor (sales lost to the open market) or buy a non-Intel product (sales lost to the competition). Each of those consequences has a different financial impact, so we quantify stockout cost for different stockout situations and different service levels. This analysis is conducted at an aggregated level and also by product line. The results of this project show that stockouts have a high financial impact in the microprocessor business.</Abstract> <Abstract>(cont.) Due to the high margins, each sale lost to the competition means losing a significant dollar amount, which may easily out weigh the inventory related costs of that product. The result is service levels that are higher than Intel had believed would be appropriate. The quantification of the financial impact of the different stockout situations will be a valuable input into further supply chain optimization analysis including adjustment of finished good inventory levels.</Abstract> <Access xmlns="http://purl.org/coar/access_right" > </Access> </Publication>