Safety stock models have been developed for traditionally short lead-time supply chains. With globalisation, long lead-time complex supply chains have become the norm for multi-national organisations. Customers have evolved and are expecting better supply reliability at lower costs. The research investigates the need for developing new safety stock models that adapt to the changing global supply chains and customer needs and can optimally absorb supply and demand variability. The new safety stock models should ensure promised customer service levels. Sasol Solvents, a chemical commodity company, was used as the basis for the research. The organisation has global distribution hubs in four regions with unique location based constraints. The sales and supply chain personnel in these regions participated in the research. It was found that the current safety stock models exclude applicable variables that are needed to determine the optimal safety stock levels in a long lead-time supply chain. This exclusion causes sub-optimal safety stocks, which result in lower customer service levels. New safety stock models should therefore be developed that contain these variables identified and should be adaptable to the evolving changes in customer preferences and supply chain configurations. The new models should ensure the optimisation of profitability for global organisations. / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

The aim of this thesis is to create an application in MS Excel, which would have been able to count on basic stock models, and Markov decision processes with alternatives. This issue is devoted to the first part of the work. This is the theory needed to understand the basic principles and method of calculation tasks. The second part describes the developed application that can be solved one-product and multiproduct deterministic stock models, stochastic stock models and Markov decision processes with alternatives, and changing valuation of the transition. The description is supplemented with graphic images directly from the application, which makes using applications easier to understand. The part of work is also CD with created application.