Question

In no more than 400 words, compare and contrast managing the supply chain, managing inventory, inventory models, and the nature of aggregate planning.

Answer 1

Supply chain management is an integral part of a manufacturing industry. This involves handling of not only the incoming raw materials and packing materials but also managing timely despatch and delivery of finished goods. Supply chain handling is all about timely arrival and despatch of goods from the manufacturing facility. It also involves ensuring all kinds of documentary approvals/clearances as well for the incoming and outgoing materials.

Inventory management on the other hand is stocking of raw materials, packing materials and finished goods at the manufacturing entity premises or warehouses. This involves stocking of materials to ensure there is no shortage for production or finished goods for despatch based on orders received.

Inventory model pertains to analytical method to determine the optimum levels of stock needed to be maintained in the inventory to ensure no break in production. This also helps in forecasting dates on which re-order of materials should be done to maintain adequate stock for production.

Aggregate planning on the other hand is a marketing analytic tool to predict levels of raw materials and resources that may be needed in the next 6 months to 18 months based on market demand forecasts. This helps industries to prepare better and avoid over stocking and thus reduce costs.