Master of International Business Essay Example for Free

Master of International Business EssayWhat is descent turn each over? How can a high scrutinize turnover ratio be detrimental to a firm? Inventory turnover refers to the number of sentences that lineage is sold in a champion year conclusion. It can be calculated by dividing the cost of goods sold for a particular period by the average neckcloth for that period. High inventory turnover whitethorn signal a depression-down level of inventories, which can increase the chance of overlap songouts. 2. Distinguish among cycle, safety, pipeline, and questioning pipeline. Cycle (base) stock refers to inventory that is needed to satisfy normal demand during the course of an inst any cycle. Safety (buffer) stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time. line of merchandise (in-transit) stock is inventory that is en route between divers(a) nodes in a logistics system, while speculative stock is inventor y that is held for several reasons to include seasonal demand, projected price increases, and potential product shortages. 3. qualify what is meant by inventory carrying cost.What atomic number 18 some of its main components? Inventory carrying cost refer to the costs associated with dimension inventory. Inventory carrying costs consist of a number of opposite components, and their importance can vary from product to product. These components include obsolescence costs, shrinkage costs, storage costs, taxes, and interest costs. 4. Discuss the concept of stockout costs. How can a stockout cost be calculated? Stockouts refer to pips where nodes demand items that are not immediately available and stockout costs refer to the costs associated with not having items available.Calculation of a stockout cost first requires a accompany to classify potential customer responses to a stockout (e. g. , delays the purchase, lost sale, lost customer). Next, the company needs to assign probab ilities to the various responses as well as to assign monetary losses to the various responses. The respective probabilities and losses are multiplied together and and then all costs are summed to yield an average cost of stockout. 5. Distinguish between a unyielding baffle quantity and pertinacious order interval system. Which one generally requires much safety stock? Why?In a fixed order quantity system, the order size stays incessant (although the time interval between orders may vary) in a fixed order interval system, the time interval is constant (although the order size may vary). The infrequency of inventory monitoring makes a fixed order interval system more susceptible to stockouts and thus in that respect is likely to be higher(prenominal) levels of safety stock in a fixed order interval system. 6. Explain the logic of the EOQ model. The logic of the EOQ model is as follows determining an order quantity requires a company to balance two costs the costs of carrying the inventory and the costs of parliamentary law it.Inventory carrying costs are in direct semblance to order size that is, the larger the order, the greater the inventory carrying costs. Ordering costs, by contrast, tend to decline with order size but not in a linear fashion. The EOQ attempts to find the point (quantity) at which ordering costs equals carrying costs. 7. How can inventory flow diagrams be useful to a logistics divvy upr? They afford a visual depiction of additions to, and subtractions from, inventory. This could be helpful in identifying any patterns that might be occurring.In addition, inventory flow examples illustrate how safety stock can offset an increased rate of demand as well as longer than normal replenishment cycles. 8. Discuss what is meant by first rudiment analysis of inventory. What are several measures that can be used to determine ABC status? ABC analysis is an start out that substantiates all inventories are not of equal value to a firm and, as a result, all inventory should not be managed in the same way.Measures that can be used to determine ABC status include sales volume in dollars, sales volume in units, the fastest exchange items, item profitability, or item importance. . What are implications of the JIT approach for supply chain oversight? The consequences of JIT actually go far beyond inventory management and JIT has definitive implications for supply chain efficiency. One implication is that suppliers must(prenominal) deliver high quality materials to the take line, in part because of JITs emphasis on low (no) safety stock. Moreover, because customers in a JIT system tend to place smaller, more frequent orders, it is imperative that suppliers order systems are capable of handling an increased number of orders in an error-free fashion.Smaller, more frequent orders, coupled with finale supplier location, tend to favor truck as a mode of transportation and this means that production and distribution faciliti es should be designed to support truck shipments. 10. How does vendor-managed inventory differ from traditional inventory management? In traditional inventory management, the size and timing of replenishment orders are the responsibility of the party exploitation the inventory. Under vendor-managed inventory, by contrast, the size and timing of replenishment orders are the responsibility of the manufacturer.This represents a huge philosophic shift for some organizations in the awareness that they are allowing another party to have control over their inventories and this requires a great deal of trust among the various parties. 11. Do switch items or complementary items present the greater managerial gainsay? Support your answer. Either answer would be acceptable. Students should recognize that both substitute items and complementary items present managerial take exceptions, but the nature of these challenges is different.For instance, one challenge with substitute items might be the amount of product to hold a challenge with complementary items might be product attitude in a retail outlet. 12. Define what it meant by light inventory. What are several ways to manage it? Dead inventory refers to product for which there is no demandat least under true marketing practices. Because dead(p) inventory has often been associated with overproduction of items that customers do not want (or need), one hint would be make to order as opposed to make to stock.Having said this, an change magnitude source of dead stock in recent years involves special, highly customized orders that never end up with the customer. Suggestions for dealing with this situation include partial (or full) prepayment as well as a no-return policy. Another suggestion is for companies to more precipitously market their dead stock, and companies might also sell dead inventory via auctions. Another possibility is to present the dead inventory to charitable causes. A last resort is to simply throw away the dead inventory in order to free up storage space. 13.Explain how an SKU might have different meanings, depending on ones position in the supply chain. A retailer, for example, might keep records in call of individual items or case lots, while the warehouse that supplies the retailer may deal simply with case lots or pallets dozens of a product. In turn, the distributor that sells to warehouses may deal with exactly pallet loads or vehicle loads, and may only accept orders only for pallet loads or vehicle loadsand not case lots or individual items. 14. Why is it important for a manager to understand on the loose(p) considerations with respect to inventory management?One reason is that the increasing quest for customer service and customer satisfaction is leading many companies to engage in informal considerations. Even though formal inventory analysis should not be ignored, they should not be utilise without taking into account informal arrangements. The informal arrangements may not fit any formal inventory tenets, but many informal considerations tend to do an excellent job of satisfying customers. And, without customers, businesses are not going to be very successful. 15. Discuss some of the challenges that are associated with managing repair and replacement parts.One challenge is the difficulty in forecasting the demand for these productswhen will products break down or fail? As such(prenominal), it becomes challenging with respect to which parts to carry as well as the trance stocking levels for them. Another challenge involves the number of warehousing facilities to be used Should the parts be more decentralized or more centralized? These and other challenges have caused some companies to outsource their repair/replacement parts business. 16. Which presents the greater contain logistics challenge (1) Returned items or (2) Refurbished and recycled products? Support your answer.As was the case with question 11, either answer is accept able. Again, it is important to recognize that both present reverse logistics challengesbut the nature of the challenges is different. For example, there is unpredictability with respect to returned items, in terms of return rates and product content. Refurbishing and recycling, by contrast, are predicated on sufficient product volumes, which require suitable storage space. 17. What are substitute items and how might they affect safety stock policies? Substitute items refer to products that customers sensible horizon as being able to fill the same need or want.With respect to safety stock policies, if a consumer has little hesitation in substituting another item for one that is out of stock, there would appear to be minimal penalties for a stockout. It is also important that companies understand substitution patterns in the sense that Product A may be a substitute for Product B, but the reverse may not be true. In such a situation, safety stock policies would need to reflect the a ppropriate relationships. 18. Which supply chain participant(s) should be responsible for managing inventory levels? Why?The key to this question is the word managing. Although various inventory approaches may require certain select participants to maintain the inventory, supply-chain effectiveness and efficiency would argue that all supply chain participants should be involved with managing inventory levels. Because the supply chain is a system, one companys inventory policies and practices can impact the other members of the supply chain. Failure to consider these other participants when view inventory policies and practices could lead to dysfunctional consequences. 19. Should inventories be considered investments? Why?The text suggests that inventories should be considered investments. Carrying costs for inventories can be significant the return on investment to a firm for its funds tied up in inventory should be as high as the return it can obtain from other, equally uncertain uses of the same funds. 20. Since the mid-1990s, many beer and soft-drink cans and bottles have contained a freshness envision stamped on them to indicate the latest date that the product should be consumed. What problems might such a system cause for the people responsible for managing such inventories? Discuss.There are a variety of possible answers to this question. One consideration is that product needs to be in places where it can be bought prior to the expiration date. At a minimum, this means that companies need to be able to identify individual products, locate the products, and move the products to the appropriate place(s). The oldest inventory should be turned ahead other inventory. Another consideration involves what to do with expired product, a situation that brings into play reverse logistics considerations.