I’m stuck on a Management question and need an explanation.
please paraphrase this :
1- To ensure effective production, Sport Obermeyer need to consider various factors that either directly or indirectly influence the production, with respect to each style. If the products are to be made in China, it means there will be variance in the time the Chinese manufacturers will take to avail the products in Colorado. Additionally, the company will take more time to have finished products. Therefore, the company should establish appropriate strategies that will ensure the products are readily available to the customers. This would involve instituting appropriate logistics measure to ensure effective shipping of the final products to the customers. The company should always consider satisfying customers interest in every step used. Concerning shipping, the company can outsource the services that have a good reputation to ensure the products are always available to the customers. Outsourcing means that the supply chain services are more geographically diverse, thus either natural or artificial disasters can have adverse effects on the system or the company. Sport Obermeyer, has not instituted appropriate logistics systems within their system. Additionally, the company may lack the capacity to sustain its services and also run a parallel system that requires commitment and surveillance. This shows that the best option for the company is to outsource the logistics services unless they have similar customer lead time with Hong Kong. There is a need for the company to consider how outsourcing benefits the company in one way or another.
2- a. The role of inventory when dealing with shortages and oversupply dealt with costs that came along with each problem. For me and my team, we would always have a little bit of stock on hand which in turn would charge us. We would have a slightly higher cumulative cost because we were always trying to be proactive when it came to the larger orders.
2-b. One of the main lessons I learned from this simulation is that it can be expensive to house extra inventory. In the real world, I feel that you would want to be as precise as possible because if you have extra it’ll take up space in the warehouses and cost extra money. On the other hand, if your company stocks out, you will potentially lose out on more sales. This lesson is very important to me because you don’t want to pay extra money to house the product if you can’t sell it. if you are paying extra money to house extra inventory, the company is wasting/losing money.