Master of International Business Essay

What is scroll disturbance? How bay window a high blood perturbation ratio be detrimental to a libertine? armoury turnover refers to the number of times that p bentage is sold in a whiz year period. It can be calculated by dividing the comprise of goods sold for a riveicular period by the average inventory for that period. High inventory turnover may signal a low level of inventories, which can increase the chance of product stockouts. 2. sort among cycle, golosh, pipeline, and speculative stock.Cycle (base) stock refers to inventory that is gather uped to satisfy normal get during the course of an evidence cycle. Safety (buffer) stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time. Pipeline (in-transit) stock is inventory that is en route between assorted nodes in a logistics strategy, while speculative stock is inventory that is held for several reasons to include seasonal demand, communicate pr ice increases, and potential product shortages. 3. Define what is meant by inventory carrying bes.What atomic number 18 some of its main comp 1nts? Inventory carrying cost refer to the costs associated with holding inventory. Inventory carrying costs consist of a number of contrastive components, and their importance can vary from product to product. These components include obsolescence costs, shrinkage costs, shop costs, taxes, and interest costs. 4. talk about the model of stockout costs. How can a stockout cost be calculated? Stockouts refer to situations where customers demand items that are non straightaway available and stockout costs refer to the costs associated with not having items available.Calculation of a stockout cost first requires a comp all to classify potential customer responses to a stockout (e. g. , delays the purchase, lost sale, lost customer). Next, the company needs to advance probabilities to the various responses as sanitary as to assign monetar y losses to the various responses. The respective probabilities and losses are multiplied together and then all costs are summed to yield an average cost of stockout. 5. Distinguish between a fixed high society measuring rod and fixed order interval system. Which one generally requires more resort stock? wherefore?In a fixed order quantity system, the order size stays constant (although the time interval between orders may vary) in a fixed order interval system, the time interval is constant (although the order size may vary). The infrequency of inventory monitoring forms a fixed order interval system more susceptible to stockouts and in that locationfrom there is likely to be higher levels of safety stock in a fixed order interval system. 6. Explain the logic of the EOQ model. The logic of the EOQ model is as follows determining an order quantity requires a company to balance two costs the costs of carrying the inventory and the costs of ordering it.Inventory carrying cost s are in direct proportion to order size that is, the larger the order, the greater the inventory carrying costs. say costs, by contrast, tend to decline with order size but not in a additive fashion. The EOQ attempts to find the point (quantity) at which ordering costs equals carrying costs. 7. How can inventory flow diagrams be helpful to a logistics manager? They present a visual depiction of additions to, and subtractions from, inventory. This could be helpful in identifying any patterns that might be occurring.In addition, inventory flow examples illustrate how safety stock can activate an increased rate of demand as well as longer than normal surrogate cycles. 8. Discuss what is meant by rudiment analysis of inventory. What are several measures that can be used to determine ABC status? ABC analysis is an approach that recognizes all inventories are not of equal value to a firm and, as a result, all inventory should not be managed in the same way.Measures that can be used to determine ABC status include gross sales volume in dollars, sales volume in units, the fastest selling items, item profitability, or item importance. . What are implications of the JIT approach for show chain management? The consequences of JIT actually go far beyond inventory management and JIT has valuable implications for affix chain efficiency. mavin implication is that suppliers must deliver high quality materials to the production line, in part because of JITs emphasis on low (no) safety stock. Moreover, because customers in a JIT system tend to bit smaller, more frequent orders, it is imperative that suppliers order systems are capable of handling an increased number of orders in an error-free fashion.Smaller, more frequent orders, coupled with close supplier location, tend to favor truck as a mode of transportation and this means that production and distribution facilities should be designed to support truck shipments. 10. How does vendor-managed inventory differ f rom traditional inventory management? In traditional inventory management, the size and timing of replenishment orders are the responsibility of the party using the inventory. Under vendor-managed inventory, by contrast, the size and timing of replenishment orders are the responsibility of the manufacturer.This represents a huge philosophical shift for some organizations in the sense that they are allowing some other party to have control over their inventories and this requires a great deal of trust among the various parties. 11. Do fill in items or complementary color items present the greater managerial challenge? Support your dish. Either answer would be acceptable. Students should recognize that both substitute items and complementary items present managerial challenges, but the nature of these challenges is different.For instance, one challenge with substitute items might be the amount of product to hold a challenge with complementary items might be product placement in a retail outlet. 12. Define what it meant by curtlyened inventory. What are several ways to manage it? Dead inventory refers to product for which there is no demandat least under current marketing practices. Because dead inventory has often been associated with overproduction of items that customers do not want (or need), one suggestion would be make to order as opposed to make to stock.Having said this, an increasing source of dead stock in recent years involves special, highly customized orders that never end up with the customer. Suggestions for dealing with this situation include partial (or full) prepayment as well as a no- harvest-feast policy. Another suggestion is for companies to more aggressively market their dead stock, and companies might also sell dead inventory via auctions. Another possibility is to donate the dead inventory to charitable causes. A last retrogress is to simply throw away the dead inventory in order to free up storage space. 13.Explain how an SKU migh t have different meanings, depending on ones position in the run chain. A retailer, for example, might keep records in terms of individual items or case often, while the storage warehouse that supplies the retailer may deal simply with case lots or pallets loads of a product. In turn, the distributor that sells to warehouses may deal with only pallet loads or vehicle loads, and may only accept orders only for pallet loads or vehicle loadsand not case lots or individual items. 14. Why is it important for a manager to understand informal considerations with respect to inventory management?One reason is that the increasing quest for customer service and customer satisfaction is in the lead many companies to engage in informal considerations. Even though formal inventory analysis should not be ignored, they should not be applied without taking into account informal arrangements. The informal arrangements may not fit any formal inventory tenets, but many informal considerations tend to do an fantabulous job of satisfying customers. And, without customers, businesses are not going to be very successful. 15. Discuss some of the challenges that are associated with managing secure and replacement parts.One challenge is the difficulty in forecasting the demand for these productswhen will products key out down or fail? As such, it becomes challenging with respect to which parts to carry as well as the earmark stocking levels for them. Another challenge involves the number of warehousing facilities to be used Should the parts be more decentralized or more centralized? These and other challenges have caused some companies to outsource their repair/replacement parts business. 16. Which presents the greater reverse logistics challenge (1) Returned items or (2) Refurbished and recycled products? Support your answer.As was the case with headland 11, either answer is acceptable. Again, it is important to recognize that both present reverse logistics challengesbut the n ature of the challenges is different. For example, there is unpredictability with respect to returned items, in terms of return rates and product content. Refurbishing and recycling, by contrast, are predicated on sufficient product volumes, which require adequate storage space. 17. What are substitute items and how might they affect safety stock policies? Substitute items refer to products that customers view as being able to fill the same need or want.With respect to safety stock policies, if a consumer has little hesitation in substituting another(prenominal) item for one that is out of stock, there would appear to be minimal penalties for a stockout. It is also important that companies understand substitution patterns in the sense that Product A may be a substitute for Product B, but the reverse may not be true. In such a situation, safety stock policies would need to reflect the appropriate relationships. 18. Which tag on chain participant(s) should be responsible for managing inventory levels? Why?The key to this question is the word managing. Although various inventory approaches may require certain select participants to curb the inventory, issue-chain effectiveness and efficiency would argue that all supply chain participants should be involved with managing inventory levels. Because the supply chain is a system, one companys inventory policies and practices can impact the other members of the supply chain. Failure to consider these other participants when setting inventory policies and practices could lead to dysfunctional consequences. 19. Should inventories be considered investments? Why?The text edition suggests that inventories should be considered investments. Carrying costs for inventories can be significant the return on investment to a firm for its funds tied up in inventory should be as high as the return it can obtain from other, equally risky uses of the same funds. 20. Since the mid-1990s, many beer and soft-drink cans and bottles hav e contained a freshness get out stamped on them to indicate the latest date that the product should be consumed. What problems might such a system cause for the people responsible for managing such inventories? Discuss.There are a variety of possible answers to this question. One consideration is that product needs to be in places where it can be bought prior to the expiration date. At a minimum, this means that companies need to be able to identify individual products, locate the products, and move the products to the appropriate place(s). The oldest inventory should be turned before other inventory. Another consideration involves what to do with expired product, a situation that brings into play reverse logistics considerations.