What types of decisions must Chad Thomas make daily for his company’s operations to run effectively? Over the long run?
Chad Thomas’s company business is mostly focused on the customization of creative furniture include the specifying material choose by the customer. However, this brings to a bigger problem, the capacity of the inventory and workforce. Refer to the case study, it can be found that actually, the customization of furniture is also bringing some disadvantages which is the increase in lead time and higher inventory cost.
In the long run, the increase in sales and order will cause higher pressure on the workforce and capacity. This will totally influence the effectiveness and efficiency of productivity. If the sales and order still increasing for a long time, this will cause the production line can’t afford the supply because of some problems like lack of material, not enough workforce and facility, complex transportation network, and so on. If the company use to rush out the furniture for the customer, this will possibly affect the product quality too. In conclusion, Chad Thomas must make the decision to create a new type of baseline with the target to decrease the lead time of the production so that the production line can handle the higher capacity of the order and sales.
To make sure that the
company operates can be run effectively, it must bring change and improvement
to the production line while also consider the cost. The accumulation of the
stock and material so on will cause overload to the inventory volume, continue
the increase of inventory volume will also highly increase the inventory cost,
this was a bad circulation. So that the company should choose to make a difference
on the production line, such as the company can use the just-in-time principle
to decrease the stockholding and cost. Just in time principle should be able to
avoid the accumulation of the material and stock if the supplier and manufacture
can cooperate nicely. This can also decrease the burden of the financial on the
cost and increase the effectiveness and efficiency of the lead time.
Moreover, there is
another baseline to support standard furniture production. This was also one of
the financial sources of the company. If both lines having big gaps and
differences were making the manufacturing and financial burden become heavier.
If the company could decrease the gap between both lines, it can be decreasing
a lot of the cost and lead time too. For example, the same material and
facility using in both lines can save more inventory space, easier to manage
and maintains, and shall be able to decrease the workforce needed and cost too.
In simple word, the company need to decide to make sure there are not
too many facilities and raw material and process involved in each supply line so
that can save more time and cost in progress
Last word it will be the
worst choice if close down one of the supply lines because this will make the company losing its opportunity and income which will make the financial situation even worst. If the company could adapt and make good use of both the
standard line and customization line, it will totally increase the potential
and profit of the company to grow and develop in the future.
Business Math THEORY PART
https://spotthewrld.blogspot.com/2021/01/business-math-theory-part-trade-in.html
https://spotthewrld.blogspot.com/2020/10/logistic-case-study-nurnberg-augsburg.htm
https://spotthewrld.blogspot.com/2020/12/malaysia-economy-subject-simple-note.html
https://spotthewrld.blogspot.com/2020/12/d3-critically-evaluate-supply-chain.html
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