Question

8	What sourcing category would the following items typically be classified in? Item A: high volume/value, low risk, multiple potential suppliers Item B: low volume/value, high risk, very few potential suppliers
9	Which manufacturing strategy has the shortest / fastest lead time from the customer’s perspective? Which manufacturing strategy(s) is most aligned with batch manufacturing?
10	What are the TWO primary philosophies discussed in Chapter 8 – Operations Management that are used to help manage operations in the supply chain. Provide the main objectives for each of the two philosophies.

Answer 1

A) What sourcing category would the following items typically be classified in?

Item A: high volume/value, low risk, multiple potential suppliers

Just in time (JIT) : Since the product are available with multiple suppliers JIT model can be used. In this method the items can be procured with in the stipulated time period and can be made available at the shortest period of time. One can also get the benefit of negotiation as there are multiple suppliers available in the market.

Item B: low volume/value, high risk, very few potential suppliers

Stock : For item B, the old tradition method of stocking-up should be used.As in this case the item is available with very few suppliers and also has a high risk it is advisable to stock up the item. There is also a risk of price increase as this would be controlled very few suppliers, stocking up the product will protect from the fluctuating price.

B) Which manufacturing strategy has the shortest / fastest lead time from the customer’s perspective?

Make to stock : This strategy has the shortest lead time from the customer prespective. In this strategy products are manufactured and stocked up at different level of the supply chain like warehouse, warehouse, distributors location and retailor outlet. In this strategy the products are available to the customer through out without any shortage.