Online Case Study: Meditech Surgical Meditech’s problems are not limited to meeting demand and supply while introducing new products but the managing production and inventory even during normal circumstances. To add to the problems the company is suffering from ‘panic ordering’ from the distributing points in the case which the forecasting takes a hit because the problem is that in forecasting the future values depend on the present and past trend. The management may think that increased safety inventory will help solve the problem and hence it has the current inventory problem as 3 demand weeks. The problem really lies in the production schedule and the buffer inventory control before the product is actually launched. The graph (1-9) and (1-10) shows the bad estimation of the forecast and safety inventory right after the product is launched.
Sales at festivals are also affecting depending on weather and consumers are also price sensitive so Foxy must price competitively. Despite the long hours, Foxy owners can connect with consumers so they would know the opinions and tastes of the consumers as to help with deigning the product line. At retailers, it requires time commitment. Some stores don’t put a large order to make up for the hard work but when they do, it is all worth it. Six accounts would place 3 orders of $300 and fifteen accounts would place 2 orders of $300.
QUEST SOLUTION The biggest challenge to Barilla Spa was to implement a constant inventory control leading to overstock and stockouts. SOLUTION 1 Promoting JITD for everyone of it retail customers a quality and implementing market for JITD. PROS Having a higher profit by saving on warehouse space. Time to delivery helps with fresh stock and variation. The last part that helps is lower transportation cost by having one time delivery instead of multiple deliveries.
Joann, the purchasing agent for Occidental Aerospace, wanted to take advantage of the availability of Standard’s competitor’s bids to negotiate down on price. Until Standard is able to justify the price charged in terms of the value of the benefits provided they are in to lose Occidental as a client. Stiff competition might have force Occidental to focus on cost reduction, hence changes in its procurement policies. The company now requires multiple bidders instead of the previous sole sourcing which contributed to the long established relationship with Standard Machine over the years. Responding appropriately would not only secure the long preserved relationship but also increase Standard’s profitability.
These however cannot replace sport shoes. Threat of New Entrants Difficult to compete with large economies of scale Hard to handle all levels, more experienced firms are able to disperse New entrants suffer a severe cost disadvantage Significant amount of assets needed Economies of scale also contribute to the lack of newcomers into this market. In order to have an edge over the leaders, companies must be able to compete at all levels such as reasonable pricing, efficient production, and high product quality. These things are difficult to achieve without the resources of an established manufacturer. Bargaining Power of Suppliers Raw materials required are leather, rubber and cotton.
Additionally, the cheap labor market has been fully tapped and labor prices are increasing. Issues VF is challenged by product flow, competitive suppliers, and sourcing relationships to produce 600,000 SKUs. Supplier Problems Small margins in conjunction with recession cause suppliers to rapidly close and emerge making for a highly volatile manufacturing environment. VF hasn’t managed its supplier activities in the past, except for contracting. It’s costly for VF to closely manage the quickly shifting supplier market.
Discuss when, and why to use single-sourcing and when and why to use multiple sourcing E.x. include advantages and disadvantages/challenges with the two sourcing principles/concepts When deciding whether to use single or multiple sourcing, the management has to evaluate suppliers out of quality, delivery, technology and suppliers support. Single sourcing is common when the product and/or service are directly linked to the core- competence and the demand for JIT is important for the buying firm. Firms using single source will get a better price (economic of scale) and also a better contact with the supplier and more. However single sourcing can be devastating for a firm, worst scenario the firm would not receive any products.
One problem Amy has is some customers are slow paying, leaving Amy’s Bread scrambling for money to pay overdue accounts. Also, Amy’s payroll expenses are extremely high which lead in place of fifty percent sales and higher labor cost. 4) The primary problem is that Amy shop is too small to expand. This is most substantial problem because without the adequate space the company will not be able to meet existing customer’s needs nor the needs to potential new customers. 5) This problem emerged because banks would not loan money to the business because they said a bakery is considered a restaurant and starting up a new restaurant is a risk factor.
JITD is being considered to improve operations for both Barilla and their customers, by determining the quantities and delivery schedules, rather than current approaches and procedures of responding to erratic demand patterns. This would help with eroding margins that both manufacturers and retailers are experiencing, by shipping product only as needed rather than holding large quantities of stock in both Barilla’s facilities. What are the underlying causes of the difficulty that JITD is expected to solve? The underlying causes of the issues that JITD is trying to resolve are: • Issue: Erratic demand / poor forecasting, which is driven by: o Manual process at the retailer level of both checking and conveying inventory needs o Customer behavior, which is driven by outside forces, such as competitors’ offerings, incentives, trends, etc. o Barilla’s own sales incentives drive erratic trends in purchasing large quantities (driven specifically by bulk discount incentives) • Issue: Inventory limitations and distribution centers and retailers, which are driven by: o Physical space limitations (shelf and floor space) o Competition’s need for space, incentives to retailers and distributors, etc.
The Wallingford Bowling Center Case Study Question 1: The major problems that they face are not generating as much net profit as they wanted. What they are making are only basically covering their expenses. Also, they have their slow peaks during the mornings, and certain days out of the week in the afternoon. Also, their operating expenses are rising so if they keep running their business 24 hours a day while during their slow times there losing money. Lastly, running full time with too many employees while the center is slow.