Discussion:
PRMM Motors has been a popular engine company in Europe for several years, and it manufactures engines and components that range from engine blocks to gaskets. Its manufacturing plant has been in India for the past 10 years and ships the stock to its warehouse in Wolfsburg, Germany. Recently, the company has decided that it wants to reach the U.S. market because of increasing popularity of racing. It has approached SPI and explained the situation, and the company is looking for advice on the following:
• Should it keep 1 warehouse in Germany or build an additional warehouse in the United States?
• What type of shipping method should be used, and why?
• What are cycle stock and safety stock? Should it have either?
• What type of inventory management techniques could the company us