Reference no: EM132248000

With regard to the principles of inventory management as they relate to an organization’s overall day-to-day operations. While each organization must understand their specific business processes and how inventory will affect those processes, you must consider the fundamental principles of inventory management. You have just recently taken over as the Operations Manager at a local organic produce farm, Organically Good. The owner has asked you to send her an email outlining the various benefits and risks associated with expanding the farm’s business to several international locations. A non-profit, Growganic, has approached the owner and asked him to establish his farms in 22 small communities in Africa and South America. The main farm will serve as the hub for all seeds and some of the basic equipment (your company has some proprietary tools and machines that are made on the farm). The 22 locations have similar climates and soil make-up (so crops planted should be similar at each location).

Evaluate the effectiveness of the integration of inventory management processes into an organization's overall operations utilizing various inventory management parameters.

Analyze a variety of inventory management strategies in order to increase profit and reduce costs of mismatches between supply and demand.

TASKS

1. The owner of Organically Good has asked you to address the following concepts, in an email format:

a. What type of inventory management strategy should Organically Good use? Should it be the same at each location? Why or why not?

b. What risks and benefits can Organically Good expect due to economies of scale? How do the locations of the 22 farms impact economies of scale?

c. What types of data do you expect to collect at each of the farms to help determine optimal inventory levels and expected profits?

2. Help at least two classmates, consider their selection of an inventory management strategy.

a. What strategy(ies) should Organically Good use? If you choose that same strategy for each location, explain why. If you chose different strategies at different locations, explain why. It should be clear to the reader your reasoning for inventory management strategy(ies).

b. Help your peer identify an additional risk or benefit they may have overlooked in their analysis of economies of scale and explain why you chose this risk/benefit. Your response should be formatted as if responding to them in an email.