Case 2 Knot Holes

Case2: Knot Holes

Principleof Inventory and Material Management

Inventoryand Material Management is considered to be the practice thatinvolves controlling and overseeing ordering, storage and use ofcomponents that the company utilizes in the whole process ofproduction of items it sells (Anupindi,Chopra, Deshmukh, Van Mieghem, &amp Zemel, 2011).It also incorporates the practice of controlling and overseeingfinished goods products for sale.


CorrectingMr. Ash method

Mr.Ash method can be corrected if he can apply the use of lead timereduction which is a good approach to improving productivity,streamlining operations and also increasing the output of finishedproducts. Furthermore, the original equipment of manufacturers mayoften be affected by poor means of transport that can extend leadtime this slows down and can impact the whole manufacturing process(Anupindiet al. 2011).Mr. Ash operations can be made easier if he applies the stock-outsmethod as he will have to build enough structures to stock the rawmaterials which are necessary and most needed by both new andexisting customers. The issue of shipping can be corrected if Mr. Ashcan try to work with a supplier who keeps the stock on hand in itswarehouse and work on order as he or she keeps on monitoring theusage (Richard).


Yes,the order quantity and the re-order point needs to be doneindependently. This is because the order quantity can be of help tosimply monitor the optimal order quantity for a company and atrelatively lower prices while the reorder point is there to giveadvice on when to place an order for particular products that arebased on their historical demand (Richard). The reorder level alsoallows for adequate inventory at hand account for demand while thesubsequent orders arrive outstandingly to lead time. Since retailtrading can be competitive and unpredictable then the perceivedinterest on forecasting could affect the order level and reorderpoint hence assisting the company in finding alternatives ways tosolve the issue of forecasting.


Yes,Mr. Teak’s stock plan for the cutting board is in the rightdirections because this will help him in reducing huge inventorylogistics cost and stacks of rotting lumber that is being stored inthe lot adjacent to the facility. This is to reduce the wastes thataccrue as a result of overstocking because Mr. Teak’s found thatMr. Ash was having an issue with his products which led to a delay.Moreover, Woodcraft Company has been very unreliable in estimatingthe delivery schedules (Anupindiet al. 2011).Mr. Teak’s stock plan assist in observing the issue of deliveringquality products because the board had a stable demand, and itproduces throughout the year which makes Mr. Teak’s inventory planfor cutting board a step in the right direction since it observes thedemand and the taste for the products to its clients.


WoodcraftCompany needs to increase the frequency of the orders in smallquantities to help reduce the lead time and carrying cost. Thisaspect is applicable when you are not ordering from domesticsuppliers. Woodcraft should also automate the transmission ofinformation, and for this case, a purchase order needs to go throughdifferent steps of approval before the sent off to the supplier(Anupindiet al. 2011).Woodcraft also needs to provide forecasts to Mr. Teak’s so as toaccelerate shipping on an incomplete order because he may be runningout of stock and the stock is needed so as to enable productionprocess completion.


Anupindi,R., Chopra, S., Deshmukh, S. D., Van Mieghem, J. A., &amp Zemel, E.(2011). Managing

businessprocess flows: principles of operations management.Pearson Higher Ed.

RichardJ. Tersine. Principles of Inventory and Materials Management FourthEdition