Project #74904 - short post responding to other students answers

4 question to be answered/respond to. respond to 4 stuents post and just agree or disagree and add a bit more. 150 words or more for each question and no format needed.

 

1.The book also used the example of an oil refinery for this type of production which really seemed to fit the definition and term rather adequately. On the other hand, "chasing" a forecast or using the chase plan of production might be used when a service is the asset of a firm or if the cost of storing inventory is extremely high. This is very different than the level plan in the sense it changes from period to period and adapts to the demand for that product or services which carries lower inventory. A firm that has a low cost of changing its production process would also benefit from the chase plan which all comes together as larger businesses wanting to use the level plan and smaller businesses wanting to benefit from the chase plan in my opinion. Both plans have their perks and downfalls but overall, they serve a valuable purpose for whatever type of forecast your company may project or foresee.

 

2. A chase production plan is, "A sales and operations plan in which production is changed in each time period to match sales forecast". (Bozarth & Handfield, 2013) There a several companies that experience higher supply and demand needs during different quarters of the year and may need to increase production on both the retail and wholesale ends of a business. For example, a company like Matchbox will almost certainly need to increase their production during the Christmas holiday because of the increased supply and demand need of the consumers purchasing gifts for children and families at Christmas time. This may also effect the retail side of things for companies like Toys R Us who cannot support their consumer needs simply on inventory and must increase their weekly or even daily deliveries spawning from black Friday and leading up to Christmas Day as well.

 

3. Demand and lead time variation throw a huge clog in the need to lower a consistent lead time and demand quantity, which also brings the safety stock up, which in the end drives the cost to do business up. The EOQ matches up perfectly to the point made by the JIT movement that says companies need to maximize their process flexibility to keep ordering costs low. The EOQ is the precise quantity that is capable of bringing down the total inventory holding cost and ordering cost while making sure to have enough inventory for the desired demand (Bozarth, 2012). This concept fits right into the movement as this would help shrink lead times since the demands are consistent, and also would eliminate the higher holding costs for a company since essentially, they are using the minimum amount of days possible to hold each item. This formula is all about stabilizing demand levels and I feel that it is the most consistent factor to go with the argument for lowering inventory levels.

4. Our texts explains that demand rate ( d ) and lead time ( L ) are rarely fixed numbers and can fluctuate. Calculating the average of both demand rate and lead time can then be plugged into a better solution mentioned in our text as ROP = dL + SS. SS = Safety Stock. This in turn can be used to better calculate a reorder point higher than ROP= dL. 

Using these formulas can better help JIT minimize their total ordering costs, stabilize demand levels, shrink lead times, and higher holding costs so that profits can be maximized, inventory kept to meet supply and demand, and decrease the chances that JIT may encounter inventory shortages or overages, and better meet the consumer need while decreasing their total cost of expenditures.

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Due By (Pacific Time) 06/27/2015 12:00 am
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