Case Scenario: John and Michael, the owners of the Stone Horse Supply Company, are very excited about the new business opportunities their company is going to face. One of the obstacles that they are concerned about is how the business is going to support the growth in customers and locations. With that in mind, John and Michael ask that you prepare a report for them explaining stock-outs and how companies approach and resolve issues relating to growth.
Task: In 1,500 to 2,000 words explain stock-outs and how companies approach and resolve issues relating to growth. You must address the following in your report:
- Explain the purpose of using stock-outs to control inventory.
- What are the costs associated with using stock-outs?
- What is the demand for stock-outs?
- Explain in detail the ways to measure product availability.
- Explain the importance of the level of product availability.
- Provide at least 3 of the factors that affect the optimal level of product availability.
- Research and discuss a company that has gone through times of growth and seen the affects of stock-outs.
- Provide at least 3 recommendations, to John and Michael, of how not to sustain problems with stock-outs when dealing with an expansion.