Question

In: Operations Management

In general, which of the following attribute combinations makes a product the most difficult to manage...

In general, which of the following attribute combinations makes a product the most difficult to manage from a supply chain perspective?

Long lead times and constant, predictable demand

Short lead times and unpredictable demand

Short lead times and constant, predictable demand

Long lead times and unpredictable demand

Solutions

Expert Solution

Answer is: Long lead times and unpredictable demand

Explaantion: With unpredictable demand we cant have a set pattern about the forecasting. With such unstable demand, if lead time is long, either we wont be able to fulfil the demand staying with long backorders and stockouts, else we will have a large ending inventory which will cost more on the holding cost. Hence this is most difficult to manage.

Why other options are incorrect:

  • With constant, predictable demand, even if the lead time is long, we will be able to release order in order to receive it ontime. This is quite easy to manage.
  • Short lead time and unpredictable demand is also normal to manage as we will be able to fulfil the backorders due in time.
  • Short lead time and constant, predictable demand is the easiest to manage as we know the demand and the lead time is short to receive the order.

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