Problem Statement
Littlefield Technologies is a firm that has developed Digital Satellite Systems (DSS) product that has a product life of 268 days. The company’s strategy is to produce the product as per order and when the company has enough cash to pay the suppliers. This means that the company only produces goods as soon as orders are made and when there is enough money to support the production. In order to make this strategy successful, the following criteria should be met:
• Raw materials inventory should be less than the reorder in point,
• There should be no open orders, and
• There should be enough cash to pay the suppliers.
Contracts are based on different pricing contracts that have different lead times with the short lead times
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In addition, on day 105, the reorder quantity was 13,200. This approach was effective as it increased the number of inventory kits available for production. In total, the company used $2,059,000 to increase its inventory levels. The increased inventory levels and the readjustments of reorder points enabled the factory to increase the number of jobs accepted each day as well as to reduce the number of jobs waiting for kits. In addition, there was a high number of kits queued at station one from day 80 which was accompanied by increased utilization of station one. Besides, we were able to reduce the lead time for all the orders and this enabled the company to increase its revenues.
However, there were days when utilization of station one was below maximum capacity mainly because there was no inventory. For instance, there was no inventory between days 76 and 78 and days 84 to 86. This meant that the company was losing revenues because the machines were functioning below capacity as there were not enough raw materials. If I could play the game again, I would further increase the reorder point and quantity to ensure that there was inventory at all
In today’s operational management arena, there are certain expectations from a managerial aspect that must be met in order to be successful. A comprehensive look at the Space Age Furniture Company will show exactly what the Materials Requirement Planning (MRP) calculations are for this company at present time and then take the information given in order to properly suggest ways to improve the sub-assemblies. In addition, there will be an analysis on the trade-offs between the overtime and inventory costs. A calculation will be made on the new MRP that will improve the base MRP. This paper will also compare and contrast the types of production processing to include the job shop, batch, repetitive, or continuous, and determine which the primary mode of operation should be and exactly why. A detailed description on how management can keep track of the job status and location during production will also be addressed. Finally, there will be a recommendation on they type of changes that need to occur that will be beneficial to the company and at the same time add value to the customer. This paper will conclude with summary of the major points.
In looking at the utilization of the three machines it became apparent that Machine #1 was a bottleneck as it operated at or close to 100% utilization (Exhibit 1) with a maximum capacity of 5 kits per day. Furthermore, in analyzing the data we noted that there was spare capacity on Machines 2 & 3 so we prioritized any work from Machine #1 as the two other machines were not the constraint initially. We concluded from this that we would initially purchase an additional Machine #1 while maintaining the same number of the other two machines. We also decided that the priority should be shifted from FIFO to step 2. With both Machines 2 & 3 able to handle surges in demand, the prioritization on the constraint, Machine #1, was
Summer is almost here, and Kate Hudson is planning a new line of trendy fashions for her customers at Fabletics. Kate Hudson is known as an actress. She is also the co-founder of Fabletics, a company that specializes in bringing sporty chic wear to customers at a very affordable price. Hudson launched a line of swim-wear that is sure to capture the attention of Fabletics fans. She is also launching a line of summer dresses that she promises are super cute and very comfortable. In addition, Hudson states that the company has designed the clothes for every body type.
No real thought was given for future growth when building the assembly line, causing bottlenecks. Additionally since orders may range from several hundred to several thousand units flexibility must be built into the production design. The nineteen stations used by X-Opoly do not give the ability to successfully produce both volume and variety. With such a wide range of production orders, both permanent and temporary production lines may be looked at for both lifecycle and process improvement.
In order for a company to push its improvement and create a balanced plant, it is necessary to increase the throughput, while reducing inventory an operating expense. But, what is most important is to identify the bottlenecks to be able to focus on them. After focusing and solving the constraints, everything else is going to be less powerful but important at the same time.
DataClear had also recorded very impressive sales growth in its first two years and, given the projections, were looking at 300 percent average revenue growth thru '02. The case analysis available shows that DataClear has a $600 million annual domestic market for its current product and $1.2 billion when you add in the global market in telecommunications and financial services. With product expansion, there was a potential annual $2.7 billion market ($1.5billion domestic/$1.26 billion abroad) to target in the telecommunications, financial services, chemical, petrochemical, and pharmaceutical industries combined.
In the retail stores, managers are complaining of frequent stock outs even though the DC is full of merchandise, which is not moving enough through the supplier, DC, and retail stores. The inventory issue also ties in with transportation problems where accurate lead and delivery times are non-existent. The inventory turnover is not at its full potential because if the DC has merchandise yet the stores are stocked out, the inventory is frozen and will become obsolete.
The company is using a batch shop process flow structure. CBF, Inc. bases its board fabrication process on the average job size or on its typical order. This means that the company proceeds with the manufacturing process in batches so as to meet the specific requirements per order. The typical contract that the company currently gets is 60 boards per order. However, due to persisting factory defects, they manufacture a total of 75 boards per batch in order to compensate for 20% of the boards that they typically reject during the process.
...nager) to think of idea to get many orders. They found Europe market is the way to fill the capacity. However, new orders created new bottlenecks. Consequently, two things were done. First, the inventory is increased. Second, the delivery period is increased twice than before.
So that our decisions would lead to a better performance on the inventory levels which means a more stable inventory according our policies but our order policy based on the expected demand would not be changed while the impact of our policy on the inventory is better because our orders are met with a better
7). This showed that the company did not use much inventory management here at all because they did not take into account the machine breakdowns and therefore couldn’t handle the acquirement of replacement parts and only had few spare parts in hand which in turn resulted in some lower quality doors. The work-in-process inventory was also not handled properly (ForeFront Manufacturing, p. 9). There was no proper inspection when inventory was transferred between departments and therefore presented variability in yield. This made storage so difficult that some of the inventory was put on the public road. In conclusion, ForeFront’s forecasting and inventory management is very inefficient and causes a lot of delays in the production of the final good and also increases their production cost since they have to redo a few processes
The major stakeholders in this situation would be Mr. Ed Sampson who is the chairman and president of the Calgary based company. Then there is Mr. Bill Hornaday who is the chief operating officer, The government of Bangladesh who are still in the process of negotiating with the Niko Resource Ltd. The Villagers, the residents of the community who have been affected by these blowouts.
...than their current supplier. By decreasing their lead times, they would not have to buy materials for orders as far into the future as they do right now. While improving their forecasting process is extremely important, shortening lead times would lessen the extent of excess inventory. For instance, imagine that every month your forecasting is incorrect by two ambulances. With a lead time of six months for aluminum, you would order 12 ambulances worth of extra aluminum that would sit in excess inventory for that period of time. However, if you can shorten that lead time to four months, you only have 8 ambulances worth of surplus aluminum. This example does not take into account an improvement in forecasting. If both forecasting and the materials supply chain could be controlled better, Wheeled Coach has the potential to lower its spare inventory significantly.
Inventory management is a method through which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle of the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seen more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company; effective and efficient inventory management is of critical importance.
The company is now facing the demand of more products without the capability of producing, and the threat of new entrants into the market is becoming significant. Mr. James M. Elliot, the CEO and Chairman of the Board at Bytes Products, Inc, noticed that the company was facing numerous problems. The existing three plants run on 3 shifts schedule of 24hours a day and 7 days a week using up all possible production. It has now become evident to Mr. Elliot that if the three existing plans were to be running at maximum capacity at all times, the demand of production would still not be met. If the company’s overall supply is unable to meet the demands of its customers it would cause a negative impact on the company by not being able to maintain its current market share.