How OIS addresses the troublesome operational issue of sku proliferation

Problem is described here

As is the case with all OIS models, all that’s required is to develop an appropriate set of assumptions for the proposed sku reduction model.  At a minimum, it would require a revised forecast for the reduced set of skus, revised cost functions for the “streamlined” supply chain and new response functions for the revised forecast. If there are other factors (e.g., reduced customer support, improved service levels and or lead times), they should be reflected in the assumptions as well. 

These assumptions replace those in the current OIS model and it is optimized.  If it demonstrates a sufficiently attractive return on the investment required to make the changes and the firm has sufficient confidence in the assumptions, it can proceed with the reduction

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