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Define why a level capacity strategy could be complicated to adopt for an organisation operating a just in time system?
Level capacity strategy
Along with a level capacity strategy of inventory management the organisation produces at a constant output avoiding any changes within demand. It frequently means stockpiling for a manufacturer or superior holdings of stock when demand levels decrease.
Just in time
JIT needs that products must only be produced when there is an internal or external client waiting for them. This aims ideally for zero stock as an example; raw materials delivered instantly at the time they are required, no build up of work-into-progress throughout production and finished goods only produced when there is a customer waiting for them for example, a chase management strategy.
Contrast
The two principles do not support one other since the former includes stock piling which conflicts along with the latter are aim of zero stock.
How would you allocate the $100,000 bonus money and why? Remember, no 2 managers can get the same amount. Be sure to justify your reasons.
Item Cost - $7.00 Order Cost - $283.00 Annual Hold - 32% of item cost Annual Demand - 22,100 Average Demand - 442 per week Standard deviation of weekly demand 20 per week lead time
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