Discuss HOW and WHY interrelationships and interdependencies between capacity inventory and delivery performance
For “interrelationships and interdependencies between capacity, inventory and delivery performance”, capacity means the ability for workers to work on day shift, night shift and weekend, which has max work load each day. Capacity decides how much inventory we have, and we also need to pay little inventory cost. Delivery performance means if we have enough inventory then we have good performance, if we can not fulfill demands we have to pay for penalty fee. For “Critically evaluate your team’s strategies for forecasting, inventory management and capacity management.”, In the game, our forecast strategy is MOVING AVERAGE. we use moving-average(first 4 weeks(wk1-4), moving to getting average from wk2-5) method to forecast the demand in this year, which has a good average number of demand from last year , but it cannot have a quick reaction of few huge demand in that week(like wk1 ask for 2000,wk2 1800, and wk3 suddenly ask for 18000). Strategy for inventory is make to order, which cause the lack of inventory a few times. Strategy for capacity is only production once our inventory is low, which make our unit cost high(factory has fix cost if we dont produce) and cause “lagged effect”(lack of inventory cause capacity is not enough once we have huge order). “financial focus”: earn 10% of initial investment $500,000, we earn 60000 at the end. “customer focus”: 99% customer satisfactory, we only fulfill 82%. lack of inventory. Huge penalty. In order to have 99%, which means we have to have a huge inventory, which is not a good idea, the cost of 99% is too much to be perfect. we should set like 95%. Correct forecast should be macroscopical(see attached pic) and monthly(not weekly). Production should be steady and monthly. inventory should be enough for few weeks. (no need any citations)
