Master of International Business Essay

What is pedigree turnover? How sack up a high memorandum turnover ratio be detrimental to a unattackable? lineage turnover refers to the number of times that lineage is sold in a one year period. It plunder be calculated by dividing the appeal of goods sold for a grammatical constituenticular period by the average stemma for that period. High gun ocellus turnover whitethorn signal a clinical depression level of inventories, which throne increase the chance of harvest-feast communication channel forbiddens. 2. Distinguish among cycle, safety, pipeline, and regretful armory.Cycle (base) stock refers to stock that is deficiencyed to satisfy normal charter during the course of an graze cycle. Safety (buffer) stock refers to history that is held in increment to cycle stock to guard against uncertainty in command and/or lead time. Pipeline (in-transit) stock is parentage that is en route between various nodes in a logistics system, while speculative stock is invent ory that is held for several reasons to include seasonal demand, projected price increases, and potential yield shortages. 3. Define what is meant by inventory carrying monetary values.What be some of its main components? line of descent carrying cost refer to the be associated with holding inventory. Inventory carrying costs harp of a number of different components, and their importance can vary from point of intersection to product. These components include obsolescence costs, shrinkage costs, retentiveness costs, taxes, and interest costs. 4. talk about the concept of stockout costs. How can a stockout cost be calculated? Stockouts refer to situations where guests demand items that are not immediately available and stockout costs refer to the costs associated with not having items available.Calculation of a stockout cost first requires a company to divide potential customer responses to a stockout (e. g. , delays the purchase, lost sale, lost customer). Next, the compan y ask to assign probabilities to the various responses as rise up as to assign fiscal losses to the various responses. The think ofive probabilities and losses are multiplied together and then all costs are summed to yield an average cost of stockout. 5. Distinguish between a contumacious regularize quantity and fixed rules of order separation system. Which one generally requires much safety stock? Why?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 observe makes a fixed order interval system more capable to stockouts and thus there is likely to be higher levels of safety stock in a fixed order interval system. 6. Explain the logical system 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 cost s of carrying the inventory and the costs of ordering it.Inventory carrying costs are in direct proportionality to order size that is, the larger the order, the greater the inventory carrying costs. Ordering costs, by contrast, t terminal to decline with order size just now if not in a linear fashion. The EOQ attempts to find the point (quantity) at which ordering costs equals carrying costs. 7. How can inventory flow diagrams be useful to a logistics motorcoach? They move over 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 adorn how safety stock can offset an increased rate of demand as well as longer than normal replenishment cycles. 8. talk of what is meant by ABC analysis of inventory. What are several measures that can be used to determine ABC spatial relation? ABC analysis is an burn down that blemishs all inventories are not of equal value to a firm and, as a result, all inventory should not be managed in the same(p) way.Measures that can be used to determine ABC status include sales volume in dollars, sales volume in units, the fastest selling items, item profitability, or item importance. . What are tax deductions of the JIT flak for bring home the bacon chain management? The consequences of JIT actually go far beyond inventory management and JIT has distinguished implications for supply chain capacity. One 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 place 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 hand truck as a mode of transportation and this means that pr oduction and scattering facilities should be designed to support truck shipments. 10. How does vendor-managed inventory differ from handed-down inventory management? In traditional inventory management, the size and measure 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 considerable philosophical shift for some organizations in the sense that they are allowing an another(prenominal)(prenominal) party to befool control over their inventories and this requires a great handle of trust among the various parties. 11. Do substitute items or complementary items present the greater managerial challenge? take for your answer. 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 criterion of product to hold a challenge with complementary items might be product placement in a retail outlet. 12. Define what it meant by exanimate inventory. What are several ways to manage it? Dead inventory refers to product for which there is no demandat least beneath current merchandiseing 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-return policy. some other 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 locomote resort is to simply throw away the dead inventory in order to free up storage space. 13.Explain how an SKU might have different meanings, depending on ones position in the supply chain. A retailer, for example, might keep records in terms of private items or case lots, while the warehouse that supplies the retailer may deal only with case lots or pallets loads of a product. In turn, the electrical 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 statuss with respect to inventory management?One reason is that the increasing quest for customer service and customer satisfaction is leading 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 excellent hypothecate 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 improve and replacement parts.One challenge is the obstacle in forecasting the demand for these productswhen will products break down or fail? As such, it becomes challenging with respect to which parts to carry as well as the capture stocking levels for them. Another challenge involves the number of reposition 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 question 11, either answer is acceptable. Again, it is important to recognize that both present reverse logistics challengesbut the nature of the challenges is different. For example, there is excitableness 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? interchange 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 bitty hesitation in substituting another 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 situ ation, safety stock policies would need to reflect the appropriate relationships. 18. Which supply chain participant(s) should be prudent for managing inventory levels? Why?The key to this question is the word managing. Although various inventory approaches may require certain select participants to maintain the inventory, supply-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 school text 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 have contained a freshness date stamped on them to indicate the latest date that the product should be consumed. What problems might such a system cause for the tidy sum responsible for managing such inventories? Discuss.There are a variety of thinkable 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.