1) Reply to -Nicol POSTED to DQ in about 200 words:
From the first e-activity the best practices found in the video on inventory management are first establishing the software necessary to track your inventory. Without the technology to track your accurately track your inventory you would be limited on understanding your profit margins on your products as well as your carrying costs. Secondly understanding what types of products your have will aid in understanding what to stock in abundance and what to order when a customer places an order for it. The three types of stock inventory are good, bad and ugly. Good inventory is the items that you sell and make a profit on, bad inventory is the item that you have to carry to make the sale of another item take place. Ugly inventory is neither good or bad and doesn't contribute to your profits. Understanding how your inventory is affected is key to proper inventory management as well as meeting the expectations of your customers.
Two service companies that manage inventory are Jiffy Lube, and a Hair Cuttery. Jiffy Lube provides the service of oil changes and minor auto repair, their inventory consists of oil, oil filters, and auto parts. They must track their inventory carefully to ensure they have the proper type of oil oil filters and other auto parts for each vehicle they service. Without the proper inventory they are unable to service their customers needs and the customer is likely to go to another shop even if it means paying more money. Hair Cuttery provides the services of a hair cut, shampoo, blow dry and things of that nature. Hair ff's inventory consists of shampoo, combs, brushes, towels scissors, etc. Without proper inventory of shampoo, services can't be provided and the client will have to consider going somewhere else or coming back on another date when their hair be be shampooed and cut or styled. Jibby Lube and Hair Cuttery are similar in that their inventory is necessary to complete the service they provide to their customers. they differ however, because Jiffy Lube in a service only to their customers, while the same inventory at Hair Cuttery is also a source of secondary revenue. The shampoo and other styling products aren't just used in the commission of the service but also available for purchase by the customer to use at home. These consumable products generate revenue and potentially repeat business for Hair Cuttery. Without proper inventory, sales are lost and the customer can easily go to another location, or find the product elsewhere.
I would recommend to the management of Jiffy Lube that their inventory system be directly connected to their customer service system. As vehicles are being entered into the system for services, as those services are completed the system can track what type of oil, oil filters were used and deduct that from the inventory. A safety inventory can be established to trigger management to reorder specific types of their inventory when levels are low. Having the inventory system tied to the service system, requires proper documentation of every service provided on a vehicle, but also eliminates lag time in ordering and receiving inventory items. Reducing or eliminating lag time will reduce customer delay, services becoming unavailable due to inventory shortages as well as indicate shortages among employees. I would recommend to Hair Cuttery that not only a physical count of inventory items such as towels, scissors be done on a periodic basis, but that their inventory control system track not only retail product but also the products available by the stylist used on the clients. A bottle of styling product that is at a particular station that in seldom used is not utilizing that particular product on a client with the expected turn around of them purchasing the product from the retail aspect. This means that the retail inventory is being held with little to no profit being made and maintaining a higher carrying cost for having slow moving or no moving purchases being completed. If the product is not being used on the client, they simply will not purchase it. If this takes place Hair Cuttery needs to consider discontinuing the product from their retail inventory and removing it from use by stylist especially if it can be replaced with another product that is being used and being sold from their retail inventory.
2)Reply to MARV post to this DQ in about 150 words or more:
A company that is a good producing organization is Nike. Nike follows vertically integrated model for the manufacture of its footwear. The process takes place in two stages. In the primary stage, the various inputs for the production process of Nike shoes such as organic cotton, recycled polyester, leather, and environmentally preferred rubber, which are extracted and sourced form various places that are close to factories. Nike uses plans their production to meet the demand. Nike's aggregate planning was develop to tackle the problem of meeting forecast demand by adjusting production capacity. Aggregate planning has its advantages and disadvantages. It can be used across a wide a wide rang e of industries, it develops a road map to operate efficiently, it is used for all production planning processes, and is also flexible. Nike uses different way to reduce cost through various pricing strategies, their workforce by outsourcing the production of the product to other countries in the manufacturing process and their facilities, equipment and transportation by resource utilization. The service company that I chose was Bank of American uses a solid Demand forecast, production capacity, limits on capital. Aggregate planning is a balancing act between what you think you can see, how much you can produce and the raw materials you can afford.
-Compare and contrast the operational and managerial impacts of the aggregate planning decision sin terms of customer satisfaction
The operational impact of aggregate is an approach to operations that focuses on satisfying demand of the customer as it relates to products. It also relates to production, workforce, inventory and other concepts. A prime example of this would be Chick Fa Lay, they are built on being able to ensure that the customer is taken care of. The managerial aggregate planning would fall under the category of Demand Management in term of pricing strategies, promotions and advertising. I believe that the workforce also falls under managerial aggregrate as well.