Question

A distribution system comprises 2 central distribution centers (which are both replenished from a single plant), 8 regional warehouses, and 56 stores. The replenishment lead times are as follows: plant (2 weeks), DC (1 week), regional warehouse (1 week), store (1 week). What is the minimum planning horizon?

a) 1 week
b) 3 weeks
c) 4 weeks
d) 5 weeks

Answer 1

The minimum planning horizon for the distribution system is 4 weeks, considering the replenishment lead times from the plant to the store. The longer lead time to the store determines the minimum planning horizon.

Step-by-step explanation:

The minimum planning horizon for the distribution system is 4 weeks. The replenishment lead times for the various components of the system are as follows: plant (2 weeks), DC (1 week), regional warehouse (1 week), and store (1 week).

To determine the minimum planning horizon, we add up the lead times from the plant to the furthest component in the system. In this case, it would be the store, which has a replenishment lead time of 1 week. So, we add the lead times: 2 weeks (plant) + 1 week (DC) + 1 week (regional warehouse) + 1 week (store) = 5 weeks.

However, since we want the minimum planning horizon, we need to consider the longest lead time to a particular component, which in this case is the store with a lead time of 1 week. Therefore, the minimum planning horizon is 4 weeks.