Question

Both these questions have three parts; please address all of them -

2. Identify ways a company can move from a "commodity" position to one of a cost and/or value advantage. Is a commodity position always bad, and how can companies differentiate themselves in this position?

4. Provide business examples of the three operations strategies make-to-stock, assemble-to-order, and make-to-order. Explain what it would take for a company to move from a make-to-stock strategies to make-to-order, and vice versa. What are the advantages and disadvantages of each strategy?

PLEASE EXPLAIN THEM IN GREAT DETAIL. Thanks

Answer 1

(2)

Whether a business will switch from a commodity role to a cost and benefit advantage and how businesses often place themselves in this Placing in order all resources to manufacture goods and services at the lowest possible cost and at the lowest costs correlated at producing the items that the corporation positions in the special position of being willing to charge its consumers. Alternatively we can also say that in a market, a commodity product is always price-intensive. By vertical integration, a way a business would shift a commodity place to cost will be to be able to manufacture the product cheaper than any other rival. To build a market benefit a organization may try to provide intangible products such as delivery, after-sale service, or bundling functionality with certain goods. A product place isn't poor, but since it's in a demand oriented environment, it may deliver low income. It will be crucial to achieving market share distinction in that sector.

(4)

Advantages and disadvantages in each strategy :

Make to Order - Advantages - It minimizes the cause and effect of waste, it can also help in reducing the intensity of the risk of inefficiency, products can be specialized. Disadvantages - Demand of sales will be irregular, the stock material would be seriously ill, the waiting times of the customer won't be much high

Make to Stock - Advantages - Spreading resources and production, Reducing the waiting times of the customer, Able to design a proper schedule for understanding the workflow and making it smooth. Disadvantages - Trends of customers cannot be predicted, Either over inventory or too much less inventory at times, sales forecast can't be done properly.

Assemble to order - Advantages - Cost of this method will be lower than that of other methods, orders can be made according to the customer demand, Effective inventory management, Fast delivery of items. Disadvantages - Lower supply if demand is higher and lack of availability of the material, lead time can be longer than expected.

Make to stock: If the customers are served from the finished goods inventory, then it is said to be "make to stock." For examples: Most of the ready to purchase goods such as soaps, beauty creams, food items etc. in all super markets are “Make to stock" goods. Assemble to order: When number of operations is combined to meet the customer's specifications, then it is said to be "Assemble to order”. Example: When a customer wants to purchase a PC, then the finished goods such as CPU, Monitor, keyboard, mouse etc. are combined from different operations to make a final product. Make to order: When a firm collects raw materials, components and parts from different suppliers to meet the customer specification is said to be “Make to order". Example: The example of "Make to stock" is car. This product is customized as per the customer's need. There are standard models available, where extra components are added to the cars based on customer demand.

In the make to stock, customer need to accept the product as it is available. Ex: Sometimes while purchasing the car, there are only limited choices to the color of the car. This might not be limited in assemble to order and make to order. Therefore, customer satisfaction can be higher in assemble or make to order compare to make to stock.