In the Hub and Spoke model, buffers exist at both the Sourcing Unit and at the end locations. This allows the sourcing unit to also distribute and sell parts to end customers. In this model, there will be a Holdback % that will be included into the SDM calculations to protect the inventory levels at the Sourcing Unit.
Direct Ship
In the direct ship model, the sourcing unit is often a manufacturer or distributor with limited space and/or no market to sell to. All items are produced and/or sourced to be sent to the end locations. Typically, nothing is held back at the sourcing unit.
