Case Essay

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Case Prep Apix Polybob Company Discussion Questions 1. Operation department cannot meet the customer order. Symptoms Problems Jim: We no sooner have a production run nicely going, and they change the order or add a new one. The reorder point cannot recognize demand fluctuations. (Average Daily Use * Lead Time in Days) + Safety Stock = Reorder Point “Average Daily Use” need to be updated manually in a certain period, not accuracy. Jim: Even our suppliers are losing patience with us. They tend to disbelieve any order we give them until we call them up for a crisis shipment. Bull wipe effect goes to the upstream of the chain. Lost supplier sustainability. Ken: parts shortages all the time while overall inventory is going up in value. They are getting the wrong parts increase inventory cost, cannot get the right part at the right time. Frank Adams: Too much inventory, too much expediting cost, too much premium freight cost from suppliers, and poor efficiency. They always expediting the lead time either by shorten manufacturing lead time or purchasing lead time. Expediting always cost extra money. And the production line is idling for waiting the parts. 2. The MRP will solve the problem. By using the backward schedule according to the BOM, they will get the parts to build “A” on time. Based on “A”’s lead time they will work out the latest start time for purchasing the “D”, “E”, “F” parts, their supplier will have enough time to pace themselves. 3. • The sales department changes the order or adds a new one. If they break in to the firm period to take the extra order the MRP won’t work it out. There is not enough lead time to get the parts on time. • If the supplier cannot ship the parts on time the MRP won’t work nicely. • If they don’t have enough capacity to build the parts “B” and “C”, the MRP won’t work. 4. In this case they don’t have

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