Inter- Satellite Store Excess Transfer Company background: AutoZone is a leading in the United States auto parts retailer

currently having 4426 stores in 48 states and the District of Columbia All these stores are service by eight distribution centers!"arehouses Hub Network: #n most cases there is a t"o day lead time for delivering a part from the "arehouse to any store #n order to reduce this lead time$ speciali%ed stores "ith a hub& spo'e model have been setup (he hub store is generally a bigger store that stoc's more merchandise (his hub store feeds other smaller stores$ called satellite stores that lie under 2 hours of driving distance from the hub A fe" selected 'ey categories of items are fed to stores using this model (here are about )4* such hub stores servicing about +* satellite stores each A transportation system consisting of pic'up truc's e,ists "ithin each hub net"or' eplenis!ment System: (he store replenishment system is an automated system that calculates the -uantity need for an item at the store and orders that -uantity from the "arehouse!hub store Also$ any store "ithin the hub net"or' can re-uest a part from another store if needed (he hub also replenishes the stores if needed bet"een a store.s order day and delivery day from the "arehouse Excess In"entory: /,cess is defined as inventory that is greater than a year.s "orth of demand /,cess builds up in the stores constantly for several reasons 0n average all stores combined has about 1)** million "orth of items that -ualify as e,cess inventory (he replenishment team has been challenged to come up "ith an idea to reduce this e,cess in the stores New Transfer system: (he replenishment team has proposed for a ne" #nter&Satellite Store /,cess (ransfer process to reduce e,cess from stores 2hen a satellite store needs an item$ this ne" system "ill loo' for any e,cess "ithin the hub net"or' first before ordering it from the "arehouse (here is a huge potential of inventory savings in this ne" process Cost-#enefit $nalysis % Constraints: #n order to implement this pro3ect$ the benefits have to out"eigh the cost (he follo"ing are a fe" sample constraints that "ill have to be considered4 Any ne" process "ill re-uire e,tra labor hours at the store Setting up the ne" system and training the employees "ill ta'e a lot of time and effort #( has mad an initial estimate of 1) million for setting up a ne" system Sales!5evenue has to be significantly higher than all the costs (he current hub transportation system has to be used