Question

5.) Name all of the functions of inventory from your textbook. How are these functions affected by lead time, specifically whether lead times are very long, or relatively short? How does an increase, or decrease in lead time affect inventory carrying cost?

6.) Identify a project that you are interested in other than the fundraiser or job search we worked on in class. Identify the major steps of this project, and which of these are on the critical path. Then show the last step of the project and estimate the total time for the project. Use figure 17.3 from your textbook and Table 17.2 to help develop your answer. NOTE: Estimating the total project time will require developing a general understanding of what needs to be done between the first steps and the last step.

7.) If you were an operations manager for an organization (service or manufacturing) with at least 1,000 employees what three strategies would you use to make the operation as successful as possible? What is your rationale for each of the three strategies? What is one thing that might go wrong with each of these three strategies? Approach this question by first identifying a specific business, or type of business. (Note that if you are managing 1000 employees there will be a number of levels between you and the lower level employees. This is an operations question – so the response is related to operational challenges – not sales, marketing, finance, or accounting). Do not use Apple, Cargill, or Walmart.

8.) You are the owner of a small manufacturing company with 300 employees. What would be your top 5 operational strategies for making your company successful. (Do not use marketing, sales, accounting, or finance strategies). Give two specific reasons for choosing each of these five strategies (10 total reasons/justifications). Finally, give three reasons why you believe – not feel – these strategies would lead to success.

Answer 1

5) The main functions of inventory are:

• Balancing supply and demand: In case the capacity is low and demand is high, the inventory is built up in advance so as to meet the requirement of future
• Safety stock: In case of fluctuations in demand, production loss, unavailability of material from supplier etc., the inventory stock acts as a safety stock to avoid business losses
• It helps to reduce cost of operation by producing in one go and avoiding changeovers which result in wastages of time and cost

These functions are greatly impacted by Lead Time. If lead time is long, then, variability of lead time will be high. Thus, it will become essential to have high inventory to act as a cushion for variability. In case lead time is short, the inventory level can be low as the variability will be minimal. Example: If supplier for raw material is situated close by, then customer can keep less stock as it be readily taken from supplier as per requirement. Hence, it impacts the inventory directly

With Increase in Lead time, Inventory carrying cost increases as the inventory level increases. So, it becomes crucial to balance basis carrying cost and set up cost. Also, the desired service level is important to determine safety stock for inventory and is impacted by lead times.