Problem Solution: Kuiper Leda

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Problem Solution: Kuiper Leda Kuiper Leda operates within the electronic components manufacturing industry with 400 million dollars in revenue for 2007. Kuiper Leda has a smaller capacity than most of its competitors; however, it has a reputation in the industry for quality and delivery responsiveness. In March 2008, Kuiper Leda received a substantial order from an existing large customer for additional components beyond those Kuiper Leda had forecasted. Kuiper Leda did not have the capacity to meet its existing production obligations along with the new order and must identify alternate production capacity solutions. Situation Analysis Issue and Opportunity Identification Kuiper Leda has recently received an order to supply 250,000 Electronic Control Units (ECU) and 35,000 Radio Frequency Identification Device (RFID) tags which is a volume above the existing capacity levels the plant is capable of handling. Given the issue at hand Kuiper Leda has the opportunity to develop a plan to increase its current capacity limitations and strengthen its reputation in the industry. “Providing the capability to satisfy current and future demand is a fundamental responsibility of operations management. An appropriate balance between capacity and demand can generate high profits and satisfied customers, whereas getting the balance 'wrong' can be potentially disastrous. Yet although planning for, and controlling capacity is a major responsibility of operations managers, it should also involve other functional managers.” (Slack, 2008). Kuiper Leda does not currently have an effective Inventory Management Plan in place to handle the extended demand of stock and production. “An Inventory Management Plan may or may not be specific to an order. It considers the forecast error, service levels required by the client, cumulative lead time for manufacturing each unit or a batch of

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