Home Work 3

User Generated

nuzflu22

Business Finance

Description

You have been hired as the new logistics manager for the Johnson Company.Johnson Company used to be the premier manufacturer of DVD players, however with advancements in technology they are finding that many of their DVD products are now obsolete. They have a large warehouse full of older model DVDs that are no longer in demand. They had maintained a large safety stock of DVD parts andcomponents so they could easily meet demands and not have to rely solely on their suppliers who operate several states away from the main plant. With sales down, they decide to switch their product to state of the art, cellphone digital technology and switch over to a JIT manufacturing model until they are sure that this product will get up off the ground. You have been hired as the logistic manager and there are several things they want you to investigate:

They want you to recommend a way to reduce inventory. The readings share several ways that inventory can be reduced. Choose the best one and explain why this would be cost effective and beneficial for the company.

They still have doubts about switching over to a JIT system. You are to explain the advantage and disadvantages to this system and why you think it would or would not be the best system for this company and its products at this time. What are other considerations that might adversely influence the decision to transition to a JIT system?

Given the system that is chosen, in what way will the supplier relationships change or improve? How should they now work with their suppliers?

Safety stock: Safety stock is held as a buffer to protect against shortages that may arise owing to uncertainties in demand, lead time, and supply. Improving forecast accuracy to reduce uncertainties in demand, reducing replenishment lead time, and working with more reliable suppliers are some of the approaches to reduce safety stock levels. What risks would the Johnson Company run up against if no safety stocks are present and how can they compensate for these risks if they choose the JIT system?

Distinguish between recycling, remanufacturing and refurbishing. Give an example of how this company may use each and if not most effective with their current product, with what type of product would it be most effective.

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Explanation & Answer

Hello,Attached find is the completed work. I did a thorough research on the assignment and hopefully i attained the correct answers. Have a look at the work and let me know how you feel about it.Thanks and all the best😎.

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JIT
The best method that this company can use to reduce inventory includes the following:
Elimination of the obsolete inventory
Obsolete inventory is usually various items that are in stock and does not have demand
from the customers due to reason such as being outdated. In regards to this we can see that the
Johnson company have a lot of DVD products in their warehouse which are no longer in demand
due to the changes in technology and for this reason this is the most appropriate method to use
for the reduction of inventory because the obsolete stock will be eliminated in the long run (Chiu
et al., 2017). Although selling the obsolete stock at a lower price might have a negative impact in
terms of the short-term profits, it will definitely have a positive impact in the long run because
cost such as carrying cost and much more other cost associated with the obsolete products will be
eliminated.
JIT system
JIT system also known as just-in-time inventory management is the process of orderin...


Anonymous
Really great stuff, couldn't ask for more.

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