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Former Member
May 25, 2009 at 08:53 AM

The Sense of Checking Horizon



Assume a firm that makes and sells soaps and detergents that are

- Shipped to customer within 12 to 48 hours of receipt of order (from inventory- make to stock scenario with a flavour of produce to demand - last few steps of manufacturing delayed)

- The lead time for completing the last steps of manufacturing is say 12-24 hours at max.

- The ext. procurment longest lead time of one of the raw material that goes into say one of the brands of soap is say 35 days



- Also assume the industry is competitive

- Customer requested delivery date is sacrosanct and firm dare say no to that.

Assume this firm wants to implement GATP and wants to find a "decent" number for for the checking horizon.. how should this proceed.

I still dont see any "advice" on the maintenance of checking horizon considering its doing a reallly serious thing of confirming an order at the end of such date if stocks /receipts arent available and that means a lot without proper rationale.

Now retaining a definition of checking horizon = time after which supply is ALMOST certain. then this thing varies by source and period of year. ? 40% from loc L1, 60% from location L2 with lead times of 24 hrs and 72 hours respectively ..for a given location product could be very much the case.. during Xmas i source everything from location L1.. ??

So could someone list out all possible decision criteria (a list of questions that I should attempt) for maintaining a "resonably good" checking horizon to make good the utility value of GATP. For sure we are not going to change checking horizon now and then and there is only one checking horizon.