Assessing the Impact of Centralizationon Safety Stock : A Scenario Based Case Study to Support Companies Exploring the Benefits of Utilizing a Centralized Warehouse Strategy in the Absence of Historical Data

Abstract: This master thesis investigates the comparison between centralized and decentralized warehousing systems, focusing on the variation in safety stock levels and the associated safety stock holding value. The aim of this research is to address the existing knowledge gap by introducing a methodology that utilizes scenario analysis in different potential locations, incorporating a range of plausible future circumstances and integrating them into a sophisticated mathematical model. This proposed approach seeks to estimate the potential inventory savings and corresponding cost reductions achievable through the implementation of a centralized warehouse. Additionally, it aims to examine the influence of different parameters on the anticipated impact of centralization, providing a comprehensive understanding of the potential outcomes. The findings of this case study will contribute to the academic discourse on warehouse optimization strategies as well as it will offer practical guidance to companies in their pursuit of operational excellence and cost savings within their supply chains. This thesis aims to bridge the gap between theoretical knowledge and practical implementation, facilitating informed decision-making processes by the supply chain practitioner and enhancing overall supply chain performance.