Sie sind auf Seite 1von 23

Assessment Cover Sheet

Complete and attach this cover sheet to your assessment before submitting

Assessment Title Assignment 1

Programme Title: BILM

Course No.: TL7301

Course Title: Inventory and Warehouse Management

Student Name: Zainab Abbas

Student ID: 201400141

Tutor: Efce Van Heerden


th
Due Date: Mon, 16 April 2018 Date submitted: Mon, 16th April 2018

By submitting this assessment for marking, either electronically or as hard copy, I confirm the following:
 This assignment is my own work
 Any information used has been properly referenced.
 I understand that a copy of my work may be used for moderation.
 I have kept a copy of this assignment

Do not write below this line. For Polytechnic use only.

Assessor: Date of Marking:


Commented [A1]: 87 VWD !
Grade/Mark: 87 VWD

Comments:
Your assignment should be written on this document (a Microsoft Word document - do not PDF the file) and
appropriately formatted; headings and subheadings should be used, you should use either Calibri or Arial font (size 11
– excluding headings and subheadings), your work should be double-spaced and pages should be numbered.
Remember to reference your work (including in-text referencing) at all times using the APA format.

Submissions – Use this document as the template for your submission! Please submit the whole document including
cover page, instructions, your report and the rubric via Moodle. All assignments will be checked for plagiarism and
originality using Turnitin. All submissions must be saved using the following naming convention (failure to do this may
result in your assignment not being marked):

 First Name_ID number_ Assignment 1


 E.g. Ahmed_20109090_Assignment 1

BILM Assignments – Rules & Guidelines

ACADEMIC INTEGRITY & HONESTY: When submitting an assignment, you are confirming that you have adhered to
Bahrain Polytechnic’s policy on academic integrity and honesty including using APA referencing appropriately. Any
violation of this will be dealt with as stipulated in the policy.

LATE SUBMISSIONS: Late assignments are deducted 5 marks from your achieved mark for each 24-hour period after
the due date. For example, an assessment which has been graded as 73% will be reduced to 68% for the first 24 hours
late, and to 63% if late for a further 24 hours and so on. This applies to every day of the week including the weekend
and all public holidays. Assignments which receive a negative mark will receive a final mark of zero.

EXTENSIONS: On application, in writing, tutors may approve an extension up to a maximum of two (2) days (including
the weekend and public holidays) for an individual assignment. Applications for extensions must be received no later
than 72 hours (3 days) before the due date. Only one extension per course will be given. Extensions will not be given
for group work, tests or exams.

WORD LIMIT: All assignments have a required word limit which we permit a variation of +/-10%. For example, an
assignment with a 3000-word limit means that you can submit between 2700 to 3300 words. These words come from
the main body of your writing i.e. your introduction to your conclusion. We do not include title pages, contents pages,
reference lists or appendices. In-text referencing is included in the word count. Submissions which are substantially
under the word limit will receive a low mark for failing to answer the question fully. If a submission is over the word
limit, the tutor will stop marking at that point where it is 10% over (e.g. 3300 words for an assignment with a 3000-
word limit). You will not receive any marks for work that is submitted outside of the maximum word limit.
GROUP WORK: The tutor reserves the right to ask students to attend an oral group defense in cases where there is
doubt over how well the group has functioned or whether all members of the group have contributed equally. During
the defense, each member of the group is asked questions relating to the group’s submission. It is expected that all
members of the group have a thorough understanding of the whole assignment. Only the person asked the question
may respond until the tutor invites others to expand on the initial response. Failure to attend the defense will result
in an automatic mark of zero for the assignment unless extreme circumstances apply. Based on your performance,
you will receive an individual ‘adjusted’ mark for the assignment based on the following criteria:

 Displays a thorough understanding and knowledge of the contents of the assignment


 Is able to expand on the responses of other members of the group x1
 Has clearly been a key member of the group
 Displays a good understanding and knowledge of the contents of the assignment
although there may be minor gaps
x 0.9
 Is usually able to expand on the responses of other members of the group
 Has clearly been a contributory member of the group
 Displays some understanding and knowledge of the contents of the assignment
although gaps are noticeable x
 Is sometimes unable to expand on the responses of other members of the group 0.75
 Appears to have been a contributory but peripheral member of the group
 Displays a poor understanding and knowledge of the contents of the assignment
 Is frequently unable to expand on the responses of other members of the group or
x 0.5
offers unhelpful contributions
 Has clearly offered little to the group as a whole
 Displays no understanding or knowledge of the contents of the assignment
 Is unable to expand on the responses of other members of the group and any
x 0.1
contributions are unhelpful or unrelated
 Has clearly not contributed to the group

For example, following the defense, individual marks for a group assignment which was awarded a final mark of 85%
may be adjusted as follows: Student A: 85 x 1 = 85% / Student B: 85 x 0.75 = 63.75% /Student C: 85 x 0.1 = 8.5%

GHOST WRITERS / ESSAY MILLS: In cases where there is strong concern over the authorship of your submission (i.e.
we suspect someone has written it for you), you will be required to attend a meeting with your tutor and PM or HoS
to ‘defend’ your work. If you are unable to satisfy all parties that the work is yours by displaying a thorough knowledge
of the contents, concepts, terminology etc, a full academic misconduct investigation will be carried out. Due to the
severity of this, a possible outcome is your permanent exclusion from the Polytechnic.

Please refer to the generic Course Guide or your tutor is you require further clarification of the above points.
Coursework: Assignment 1
Submission Date: Sat, 14th April 2018 at 11.50 pm (via Moodle, Turnitin)
Weighting: 35% of final mark (Marked out of 100)
Type: Individual
Work Count: 2800 words +/-10%

Learning Outcomes:

Demonstrate an understanding of the process and methodology of inventory management within a warehouse and
transport environment.

Identify relevant performance measures, and evaluate the role of information systems and technology in the inventory
management in a warehouse and transport environment.

Background of the study:


Inventory management is a challenging problem area in supply chain management. Companies need to have
inventories in warehouses to fulfil customer demand. Meanwhile, these inventories have holding costs and this
investment impacts on a company’s cash flow. Therefore, the task of inventory management is to find the quantity
of inventories that will fulfil the demand while avoiding overstocks.

Bob’s bottling Company whose head office situated in the Hidd Industrial Area, Bahrain has multiple production
facilities around the GCC. Each facility has several production lines capable of manufacturing various lines of
products – canned juices, distilled water, carbonated beverages, etc. The products on a line can consume shared
characteristics of bottle size and package size.

Analysis of the current issues faced:


The company, which deals with manufacturing of cold drinks and other beverages from raw materials and selling
them to customers. Currently, Management is not trained in “inventory management”, and are used to having large
quantities of safety stocks to meet the changing demands of its’s customers.

Data Analysis:
The company’s production data for the year 2017 indicates the following. 16.69 % of total inventories (at the end of
2017) in warehouse did not have any movement that year, 3.95 % of total inventories reduced their quantity due to
the expiration of time, 5.13 % of total inventories having no sale for the year of 2016 increased their quantity due to
the production of new items. There were also items, whose inventory level was already high, however, the company
assembled new ones, therefore increasing inventory levels higher than the quantity of annual sales at the end of
2017. It was also detected that an inventory level was too high for items, whose quantity on monthly sales was less
than their safety stock. In addition, it was noticed that several items inventory level reached zero, which indicated an
out-of-stock situation had occurred.
Required from you:
A. Describe the types and categories of inventory typical to Bob’s Bottling Company and highlight the importance of
inventory management, and the reasons companies need to have inventory in the first place. (30 marks)
B. Explain which are the relevant factors impacting Bob’s bottling Company inventory levels. Your analysis should
cover all categories of inventory, as well as internal and external causes. (30 marks)
C. Discuss which strategies could be implemented to improve current Inventory Management practices in your
company including but not limited to information systems and the use of technology. (30 marks)
D. Format and Presentation. (10 marks)
Table of Contents

...........................................................................................1
Introduction:...............................................................................................................................................................8
Types of inventory: .....................................................................................................................................................8
Inventory position ...................................................................................................................................................8
Raw materials .....................................................................................................................................................8
WIP ..................................................................................................................................................................... 8
Finished-goods ....................................................................................................................................................9
In-transit stock ....................................................................................................................................................9
Source of demand ...................................................................................................................................................9
Function or use ..................................................................................................................................................... 10
Safety-stock ......................................................................................................................................................10
Speculative-stock .............................................................................................................................................. 10
Postponement: ................................................................................................................................................. 10
Cycle-stock: .......................................................................................................................................................10
Inventory management:............................................................................................................................................ 11
Reasons for inventories: ........................................................................................................................................ 11
Running operations: .......................................................................................................................................... 11
Meeting demand: .............................................................................................................................................. 11
Encountering seasonality: ................................................................................................................................. 11
Supporting production-activities: ......................................................................................................................12
Factors impacting inventory levels: ...........................................................................................................................12
Demand variability ................................................................................................................................................ 12
Forecasting ...........................................................................................................................................................12
Customer trends ................................................................................................................................................... 13
Lead-time and set-up time .................................................................................................................................... 13
Quality .................................................................................................................................................................. 14
Inventory management strategies: ...........................................................................................................................15
ABC analysis ..........................................................................................................................................................15
Advantages and disadvantages: .........................................................................................................................15
Implementation: ............................................................................................................................................... 16
Information-sharing: ............................................................................................................................................. 16
ERP: .................................................................................................................................................................. 16
Advantages and disadvantages: .........................................................................................................................17
MRP: ................................................................................................................................................................. 17
Advantages and disadvantages: .........................................................................................................................17
Implementation: ............................................................................................................................................... 17
JIT: ........................................................................................................................................................................ 18
Advantages and disadvantages: .........................................................................................................................18
Implementation: ............................................................................................................................................... 18
Conclusion: ...............................................................................................................................................................18
References ................................................................................................................................................................19

Table of figures:
Figure 1: Cardboard box ..............................................................................................................................................8
Figure 2: ABC classification (Plinta, 2012) .................................................................................................................. 15
Figure 3: Bob’s Inventory classification......................................................................................................................16
Introduction:
With reference to the case study provided, this report will include a description of inventory categories typical

to Bob’s Company, in particular to its fruit juice production line. Moreover, the report will contain an explanation of

the relevant factors impacting its inventory levels, in addition to a discussion of the strategies that can be implemented

to improve its current inventory management practices. Commented [A2]: ok

Types of inventory: Commented [A3]: 1150 WC….

According to the CILT (2014a, p. 4&13), since inventory exists as a symptom of the way businesses are run, the

inventory level held can be high or low accordingly. Generally, inventory is grouped into three categorical divisions.

These will be demonstrated as follows.

Inventory position

The first categorization is based on inventory position in the supply chain process (CILT, 2014a). It includes:

Raw materials

Raw materials are the basic components used to produce

products and thus maintaining a smooth flow of these is essential for

uninterrupted production runs (AKINDIPE, 2014). For Bob’s Company, Commented [A4]: good

these include outsourced juice concentrates that are used to produce

juices of various flavors, sugar, acids, vitamins, additives, preservatives

and tape water (Lemanowicz & Krukowski, 2009, p. 7; Bates, Morris, &

Crandall, 2001, p. 19). Other raw materials used for bottling and Figure 1: Cardboard box

packaging purposes are outsourced labels, caps, cardboard boxes and plastic bottles that share the size characteristic

of 250ml (CFTRI, "n.d.") (NEDFI, 2017, p. 11). Commented [A5]: ok

WIP

Work-in-progress is the second group. These are inventory a company is currently working on or inventory

waiting between operations, which is referred to as decoupling inventory (CILT, 2014a). Bob’s Company WIP inventory

include juice preparation stage, since the concentrate mixed with water and other raw materials is stored in tanks as

WIP. Additionally, the filling and bottling stage, as bottled juice drinks are held as semi-finished assemblies prior to

labelling and packaging (Pagliarussi, Morabito, & Santos, 2015, p. 3). Commented [A6]: yes
Finished-goods

The third group is finished goods that have completed all the processes and a sufficient inventory of these

must be held to meet customer demand (CILT, 2014a). Accordingly, Bob’s Company holds packs of fruit juices, such as

packaged mango juice. These will be stored in cool dry condition before distribution (SMEDA, 2007, p. 29)

In-transit stock

The last group is in-transit inventory, which is inventory en-route between points in the SC. For Bob’s

Company, this can be shipped inventory from their manufacturing plant to a distribution center (CILT, 2014a).

However, determining the ownership of in-transit inventory is done based on incoterms. Therefore, placing minimum

responsibility on Bob’s Company is essential. Consequently, an EX-works transaction will be agreed on with customers,

where they are responsible for order picking-ups, arranging insurance and export clearance (ICC, 2010). Commented [A7]: All points covered and succinct

Source of demand

According to the CILT (2014a), the second inventory categorical division is based on the source of demand and

is grouped into dependent demand inventory, as the inventory demand is related to internal-decisions and

independent demand inventory, where the demand of products is dependent on the external customer. It could be

argued that all demand is reliant on the customer. However, sometimes a manufacturing outfit hold products at Commented [A8]: Ok… eg’s
Commented [A9]: ??
different rate than the customer demand rate. For instance, Bob’s bottling company may build up stocks of raw

materials or WIP to respond to orange juice demand at its peak during cold season (Davis, Gunderson, Brown, & House,

2008, p. 4). Correspondingly, independent demand inventory refers to the sellable-finished inventories that are

dependent on positive or negative customer demand. For example, the consumption of citrus fruit has declined

(Martin, 2017). Consequently, reduction in production is crucial to avoid over-stocking finished goods. Commented [A10]: good
Function or use

The third category is related to inventory function or use in the SC process (CILT, 2014a). These are:

Safety-stock

Safety stock is inventory that fills the gaps during unanticipated increases in demand or delays in supplies.

Accordingly, maintaining safety stock of juice concentrate is cheaper than importing them for just-in-time production

when the demand increase (Pullman & Zhaohui, 2012).

Speculative-stock

Markets generate speculation regarding price increases and supply fluctuations (CILT, 2014a). Therefore,

speculative stock is acquired to reach economies-of-scale or to generate seasonal stock (Chowdhury, 2015). For

instance, juice concentrate quality and price is highly dependent on fruits seasonality. Respectively, speculative

inventories of frozen juice concentrate are held to ensure producing juice at both high quality and low cost level (FAO,

2001). Commented [A11]: fine

Postponement

Postponement approach refers to delaying WIP configuration, until actual demand is recognized (CILT, 2014a).

With regards to Bob’s Company, in some cases, the bottled juice product may be conveyed to a palletizing machine,

where they are stacked unlabeled for completing future private label orders. Thus, more customization is achieved

(CRC, 2005, p. 19). Commented [A12]: ok

Cycle-stock

According to the CILT (2014a), cycle-stock satisfies demand during order lead-times. Thus, Bob’s raw materials

such as labels are ordered in large amounts, because the delivery times are long, although it needs to be available in

large quantities, since it is impossible to estimate the amount of finished products to be produced (MIETTINEN, 2011,

p. 39). Consequently, labels left unused is the cycle stock of Bob’s Company until the next order.
Inventory management:
Holding inventory is connected with significant costs, termed as holding costs and include storage costs, and

costs attributed to obsolescence etc. These have a direct effect on companies’ return-on-investment. However, there Commented [A13]: ref

are also costs associated with stock-outs such as lost orders and backorder costs (CILT, 2014a). Consequently, proper

inventory management practices is important to keep inventories on optimal level, without stock-outs and excesses,

while reducing holding costs, reducing variations between demand and product availability and meeting customer

service levels (MPWANYA, 2005). Commented [A14]: relate to case

Reasons for inventories

According to the CILT (2014a), inventory is defined as stock of any item held for many reasons including

supporting businesses manufacturing activities, operating supplies and customer service.

Running operations

Raw materials inventory is kept as a safeguard for variation in supply fluctuations, since delays can occur as a

result of materials shortage in the supplier plants (SINGLETON, 2010). For instance, the supply of frozen grape fruit

concentrate outsourced from South-Africa is limited, due to delays in crops (ITC, 2016). Consequently, completing the Commented [A15]: 😊

production of finished grape fruit juice can be prevented, if insufficient frozen concentrate is in stock.

Meeting demand

According to Ogbo & Ukpere (2014, p. 6), inventory exists to providing the exact products required at the time

it is required. Consequently, Bob’s bottling Company must have the demanded products on hand when customers

want them. For example, if certain quantity of apple juice were demanded by a customer, but the number of packages

available in stock was less, the customer will get the product from a more reliable source, and hence this sale can be

lost forever.

Encountering seasonality

In case demand is seasonal, then organizations may tend to build inventory of WIP or finished goods in the

lean-period to allow for meeting the peak-period demand. This aggregate production planning can reduce potential

bottlenecks faced by companies (Springer, 2014, p. 3). This strategy applies to the orange juice case mentioned

previously.
Supporting production-activities

Organizations hold inventory that is not intended to be sold. This inventory is known as maintenance, repairs

and operations and include spare parts and oils necessary for ensuring smooth production operations (CILT, 2014a).

For Bob’s Company, these include fuels needed to operating machineries (NEDFI, 2017, p. 11). Commented [A16]: All good relevant reasons

Factors impacting inventory levels:

Demand variability

In case all products were to be produced at times when they will be sold, little inventories would be carried.

However, demand change from time to time and demand seasonality is regarded as an external factor influencing

inventory levels held. Consequently, during high seasonal demand, inventory shortage problems can emerge. While

off-peak seasonal demand can cause excess inventory (CILT, 2014b).

In relation to Bob’s Company, fruit juice consumptions register peak sales during Ramadan season, as it

increases by a quarter compared to the rest of the year (EU, 2017, p. 104). However, the majority of juice production

planning and scheduling is not strategically implemented, as processors continue to produce for stocking and Commented [A17]: yes

distribution without matching with the seasonal demand (Ruteri, 2009, p. 7). Consequently, this can be regarded as a

reason for the stock-out issue experienced by Bob’s Company.

Forecasting

Forecasting is an internal exercise in which all SC partners are involved in the information sharing that helps

in increasing demand visibility. However, poor forecasting efforts can have a direct impact on inventory levels, since Commented [A18]: ref

over-estimating sales can often cause high resulting inventory levels and excess inventory of safety stock (Huff &

Sultan, 2014).

With regards to Bob’s Company, fruit juice companies determine the quantity to be produced according to

the situational demand of the amount of juice packs sold previously. These are used to answer critical questions such

as how much SKUs has been demanded, how many SKUs to be produced and how many SKUs to be stored (Kazeem

etl., 2016). Nevertheless, most forecasting tools are not designed to handle seasonal and intra-monthly variations that

are characteristic of the juice industry (Quintiq, 2014, p. 4). Consequently, forecasting error of Bob’s company can be

regarded as a possible reason for the excess finished goods safety stock indicated in their data analysis. Commented [A19]: good
Customer trends Commented [A20]: market trends as well

Customer trends is an external factor impacting organizations inventory levels. In case a particular product

suddenly starts to sell out in the retailer premises, replenishment order goes to the distribution center, but not further.

When the distribution center reaches its minimum inventory level, the order is placed with the manufacturer, where

the product is delivered until the re-order point is reached and planning for new production is then initiated. This

major weakness in relation to slow reaction to demand trends results in out-of-stocks situation, which implies the

necessity regarding communicating consumer demand trends along the SC (Hulthén, 2010, p. 21).

For Bob’s Company, the latest consumer trend of healthy lifestyle is observed as the main reason for the

increase in fruit juice demand (Štrbac & Savić, 2010). Accordingly, this can be a reason for the stock-out issue of raw

materials and finished goods experienced within the company. However, health concerns have driven customers to

move away from drinks with high sugar content, such as citrus drinks (Martin, 2017). This indicates Bob’s 5.13% of

total inventories that had no sale, while the production of new items increased their quantity. Commented [A21]: yes

Lead-time and set-up time

A major reason for building-up inventories of raw materials, WIP and finished goods is attributed to the time

gaps between the placing an order and the time when initiating production. Ideally, just-in-time production and supply

would occur, as the customer would wait until the product is delivered and no inventory would be necessary to held.

Conversely, this is not always the case, as customers would place orders that are either required immediately at point-

of-sale or within short time-periods (CILT, 2014b). Accordingly, this forces companies to hold inventory to shorten

their lead-time and meet customers demand. Commented [A22]: correct

With reference to Bob’ Company, building up stocks of raw materials such as plastic-bottles is due to the time

involved in waiting for missing materials necessary for production. Correspondingly, stockpiling WIP is associated with

juice mixing and pasteurizing waiting times, as it becomes problematic during busy seasons especially, where having

insufficient WIP inventory contribute to low output and thus longer lead-times. However, the cartoon packaging lines

involve serial work steps and workers need to maintain the lines action by exchanging the product from one to another

resulting in longer lead-times (MIETTINEN, 2011, p. 39). These factors have a direct impact on Bob’s high inventory

levels, as such stockpiled raw materials, WIP and finished goods are shown in their data analysis as excess inventories

that had no movement.


Quality

A firm’s quality performance “output” can only be as good as the quality performance of its suppliers input.

However, when quality problems occur, the producer receives the blame, since customers assume that the producer

has the ultimate responsibility for the product. This is where companies fail to meet their customers’ expectations and

tend to fall and not survive (Bwisa, 2014).

In relation to Bob’s Company, citrus fruit quality are influenced by factors such as climatic conditions, as this

factor causes differences in concentrated juice quality among commercial citrus production areas. This is due to

diversity among citrus cultivars in their response to climate, which is a considered aspect for market quality (Zekri,

2011). Commented [A23]: yes

As stated by Tetra Pak (2018), orange juice quality depends considerably on the quality of the orange

concentrate. Accordingly, Bob’s Company may tend to stock these to counter for quality uncertainty among different

seasons. Correspondingly, frozen juice concentrates have a shelf-life and will maintain best quality for about 18

months (TreeTop, 2017). If inventory with a life-cycle is not used in the production or sale, organizations might be

forced to write-off inventory (Huff & Sultan, 2014, p. 6). Consequently, the data analysis of Bob’s Company shows that

in 2017, 16.69 % of total inventories did not move. Thus, it can be assumed that the 3.95% of inventory that were

reduced, due to time expiration is their frozen concentrates inventory. Commented [A24]: plausible good
Inventory management strategies: Commented [A25]: 870 wc

The issues mentioned earlier implies Bob’s Company need to implement inventory management strategies

that can improve its current inventory management practices. These strategies will be discussed as follows:

ABC analysis

Figure 2: ABC classification (Plinta, 2012)

ABC classification is used to classify stock based on the “Pareto Law”, which mentions that 80% of stock values

is represented by 20% of stock items. Consequently, items will be divided into A-class, where items carry most value

and less volume, B-class, as these items carry medium value and medium volume, while, C-class are the items carrying

low value, but high volume (CILT, 2014b).

Advantages and disadvantages

ABC advantages include increasing control level over inventory, which will increase the customer service levels

through ensuring the availability of materials. Moreover, optimizing storage will reduce holding costs. However, the

implementation is complex and requires significant amount of time and cost. Additionally, paying much attention to

A-class can result in suppressing the items from groups B and C. (NOWOTYŃSKA, 2013, p. 3) (Salem & Mazhar, 2014,

p. 3&4).
Implementation

Since Bob’s Company is facing issues with high inventory levels and other inventories stock-outs of raw-

materials, WIP and finished-goods, ABC analysis optimize its inventory through implementing better control measures

in relation to frequent monitoring. Accordingly, items classification will be according to their relative importance. Commented [A26]: Be more specific re the information
provided in the case which one is ABC addressing ?

Figure 3: Bob’s Inventory classification

Information-sharing

For Bob’s Company, limited access to timely information regarding customer requirements with respect to

supply quantities may lead to inventory shortage or excess. Therefore, installing information system such as ERP and

MRP will aid in obtaining real-time information, which helps in managing inventories (Namagembe & Munene, 2015). Commented [A27]: how

ERP

Enterprise-resource-planning is a system used to develop processing transactions, while maintaining relations

with suppliers, customers and business partners (Ovidiu & Dascalu, 2010).
Advantages and disadvantages

Implementing ERP system provides real-time information regarding demand resulting in better inventory

control to avoid both bottlenecks and high safety stocks. Additionally, facilitating quick-response eliminates strain Commented [A28]: ref

about raw-materials availability and reduce the need for storing high stock levels. With information, manufacturers

can know when and how much to produce and what stocks to hold, which helps in reducing stock-outs and shortening

lead-time, while information provision enables better forecasting (Namagembe & Munene, 2015) (Nemati &

Mangaladurai, 2013, p. 13). However, ERP deployments require substantial financial investment and is time-

consuming that may take up to 5years (ADRIAN-COSMIN, 2015). Moreover, ERP inflexibility is one constraint, because

once an ERP is installed, it is difficult to change how the works is organized (Conteh, 2015).

MRP
According to the CILT (2014c), MRP is a production planning and inventory control system used for dependent

demand items. The basis of this concept is to have stock when it is required in the production process, rather than

simply replenishing standard stock levels. Accordingly, the acquisition of stock items will highly depend on the rate of

their usage. Commented [A29]: not clear which issue you are addressing

Advantages and disadvantages:

As materials move down the SC, the activities performed add costs and value to these materials, while the costs

raise as a consequence of storage and handling. Then, the return-on-investment is likely to be affected by the

inventories cost (CILT, 2014c). Accordingly, MRP can reduce inventory levels, which will result in improved return-on-

investment (Tanna, 2017). Moreover, with material tracking, MRP ensures that EOQ is achieved for all lot orders.

Correspondingly, it requires accurate input information, since incorrect input will result in incorrect output.

Furthermore, it needs substantial investment of time and capital (Imeti & Miroslav, 2015, p. 4).

Implementation:

For Bob’s Company, integrating ERP and MRP can present a relatively short-term view of material activity.

Accordingly, information sharing will aid in timely respond to demand, as production ingredients will be obtained and

used in production batches within several days of being picked. Then, finished-goods will be shipped to distributors

once they are completed and minimum will be made to stock (Oracle, 1999, p. 18) (ProcessPro, 2017).
JIT:

The basic principle of JIT is to eliminate the manufacturing waste sources by obtaining the right quantity of

raw materials in the right place at the right time. The characteristic of this system include small lot sizes, frequent

delivery and short lead-times. These have a positive impact on the inventory levels carried within a manufacturing

outfit, thereby reducing holding costs (CILT, 2014c).

Advantages and disadvantages:

JIT advantages include completing the production sequence at the time it is requested by clients. Thus,

minimizing products chance of obsolesce, while cutting down on time. Furthermore, the transparency in processes

needed decrease the amount of inventory held to support this activity resulting in raising the return-on-investment.

However, it requires precise and constant information exchange regarding demand and it has risks related to

production disruptions caused by supplier’s unreliability (KÄFER, 2007).

Implementation:

For Bob’ company, implementing JIT in their juice production plant can reduce lead-time and inventory levels,

since raw materials will be obtained to produce the right amount of products at the right time, thus reducing stock of

raw materials and finished goods and reducing obsolescence issues (Hossain & Uddin, 2015a, p. 9). A study done in a

mango juice processing line suggested that with the implementation of JIT, unnecessary waiting time was reduced in

raw materials and finished goods inventory (Hossain & Uddin, 2015b, p. 8). Commented [A30]: I wanted to see which issues these would
address , The information provided in the case was given for a
reason.

However what you have said is correct and is good quality


Conclusion:
In conclusion, inventory holding attributes significant costs. Nevertheless, there are also costs associated with

stock-outs. Accordingly, inventory management practices are implemented to achieve a balance between minimum

and maximum inventory levels, while reducing holding costs and meeting demand.
Commented [A31]: Ok fine but why different formats ??
References
ADRIAN-COSMIN, C. (2015). ADVANTAGES AND DISADVANTAGES OF USING INTEGRATED ERP SYSTEMS .
Retrieved from https://pdfs.semanticscholar.org/3a50/e9c075b5fff5d6ee536dd133df851a005d8a.pdf

AKINDIPE, O. S. (2014). THE ROLE OF RAW MATERIAL MANAGEMENT IN PRODUCTION OPERATIONS.


Retrieved from
https://s3.amazonaws.com/academia.edu.documents/35540442/5314ijmvsc03.pdf?AWSAccessKey
Id=AKIAIWOWYYGZ2Y53UL3A&Expires=1523376357&Signature=cmo8MMhpoRmj7L0cceRc%2BlGF
RVc%3D&response-content-
disposition=inline%3B%20filename%3DTHE_ROLE_OF_RAW_MATERIAL_MANAGE

Bates, R. P., Morris, J. R., & Crandall, P. G. (2001). Principles and Practices of small-medium-scale fruit juice
processing. Retrieved from http://www.fao.org/3/a-y2515e.pdf

Bwisa, H. M. (2014). Factors that Affect the Quality of Inputs in Manufacturing Organisations: A Case Study
of Nampak Kenya Limited. Retrieved from
http://hrmars.com/hrmars_papers/Factors_That_Affect_The_Quality_Of_Inputs_In_Manufacturing
_Organisations.pdf

CFTRI. ("n.d."). PRODUCTION OF RTS FRUIT JUICE & BEVERAGES . Retrieved from
http://www.cftri.com/technologies/BVP/rfj.pdf

Chowdhury, T. (2015). The Factors Effecting Inventory Management System in FMCG( Fast Moving
Consumer Goods) Organization . Retrieved from
http://dspace.bracu.ac.bd/xmlui/bitstream/handle/10361/6135/14182001_MPSM.pdf?sequence=
1&isAllowed=y

CILT. (2014a). TL7301 Inventory and Warehouse Management, Lesson 1 & 2: Introduction to Inventory.
Retrieved from
https://moodle.polytechnic.bh/moodle/pluginfile.php/103016/mod_resource/content/4/Lesson%2
01%20to%202%20Introduction%20to%20Inventory.pdf

CILT. (2014b). TL7301 Inventory and Warehouse Management, Lesson 3 & 4: Inventory Principles. Retrieved
from
https://moodle.polytechnic.bh/moodle/pluginfile.php/103020/mod_resource/content/2/Lesson%2
03%20to%204%20Inventory%20Principles.pdf

CILT. (2014c). TL7301 Inventory and Warehouse Management, Lesson 5 & 6: Modern Inventory Systems.
Retrieved from
https://moodle.polytechnic.bh/moodle/pluginfile.php/103024/mod_resource/content/3/Lesson%2
05%20to%206%20Modern%20Inventory%20Systems.pdf

Conteh, D. N. (2015). Implementation Challenges of an Enterprise System and Its Advantages over Legacy
Systems . Retrieved from
https://pdfs.semanticscholar.org/bb7a/c434e09f936fbce982643638f6d2b0595a19.pdf

CRC. (2005). Major Processed Products. Retrieved from


http://www.fruitandvegetable.ucdavis.edu/files/217082.pdf
Davis, A., Gunderson, M., Brown, M., & House, L. (2008). THE EFFECT DEMOGRAPHICS HAVE ON THE
DEMAND FOR ORANGE JUICE. Retrieved from
https://ageconsearch.umn.edu/bitstream/6794/2/sp08da07.pdf

EU. (2017). The Food and Beverage Market Entry Handbook: Saudi Arabia. Retrieved from
https://www.izvoznookno.si/Dokumenti/Market%20Entry%20Handbook.pdf

FAO. (2001). COMMERCIALIZATION. In R. P. Bates , J. R. Morris, & P. G. Crandall , Principles and practices of
small - and medium - scale fruit juice processing (p. CHAPTER 18). Rome: FAO. Retrieved from
http://www.fao.org/docrep/005/Y2515E/y2515e20.htm

Hossain, M. M., & Uddin, M. K. (2015a). A Case Study to Reduce the Manufacturing Waste Prior to Improve
the Productivity Factors of a Litchi Juice Production Plant by Using Value Stream Map and Six Sigma
Scale. Retrieved from https://www.ijser.org/researchpaper/A-Case-Study-to-Reduce-the-
Manufacturing-Waste-Prior-to-Improve-the-Productivity-Factors-of-a-Litchi-Juice-Production.pdf

Hossain, M. M., & Uddin, M. K. (2015b). An Approach to Improve the Process Cycle Efficiency and Reduce
the Lead Time of a Mango Juice Processing Line by Using Lean Tools: A Case Study. Retrieved from
https://www.ijser.org/researchpaper/An-Approach-to-Improve-the-Process-Cycle-Efficiency-and-
Reduce-the-Lead-Time.pdf

Huff, R., & Sultan, M. (2014). Impact of Poor Forecasting Accuracy. Retrieved from
https://pdfs.semanticscholar.org/bc9d/15d73b8de8278f8c2902a2fa2a4a6ffe0ac4.pdf

Hulthén, H. (2010). Information integration between retailers and manufacturers in Swedish food retail
supply chains . Retrieved from http://www.diva-
portal.org/smash/get/diva2:410318/FULLTEXT01.pdf

ICC. (2010). Incoterms® rules 2010. Retrieved from https://iccwbo.org/resources-for-business/incoterms-


rules/incoterms-rules-2010/

Imeti, A. A., & Miroslav, L. (2015). PROJECT SCHEDULING METHOD WITH TIME USING MRP SYSTEM.
Retrieved from http://scindeks-clanci.ceon.rs/data/pdf/2406-2588/2015/2406-25881501058I.pdf

ITC. (2016). Fruit Juice Market. Retrieved from


http://www.intracen.org/uploadedFiles/intracen.org/Content/Exporters/Market_Data_and_Inform
ation/Market_information/Market_Insider/Fruit_Juice/Fruit%20Juice%20Price%20and%20Market%
20Trend%20Monitor%20June%20%202016.pdf

KÄFER, R. (2007). Advantages and disadvantages of a Just in time/Just in sequence production . Retrieved
from http://www.cce-gmbh.biz/attachments/File/205-207_Publication_20-Nov-2007_Herlay

Kazeem, R. A., Orsarh, E. S., Ehumadu, N. C., & Igbinoba, S. (2016). DEMAND FORECASTING OF A FRUIT
JUICE MANUFACTURING COMPANY. Retrieved from
https://www.ijser.org/researchpaper/DEMAND-FORECASTING-OF-A-FRUIT-JUICE-
MANUFACTURING-COMPANY.pdf

Lemanowicz, M., & Krukowski, A. (2009). Quantitative description of the fruit industry and fruit supply
chains in Poland. Retrieved from
http://ageconsearch.umn.edu/bitstream/58083/2/Lemanowicz.pdf
Mahagaonkar, S. S., & Kelkar, A. A. (2017). Application of ABC Analysis for Material Management.
Retrieved from https://www.irjet.net/archives/V4/i8/IRJET-V4I8108.pdf

Martin, B. (2017). Trade data. Retrieved from http://www.fruitjuicefocus.com/category/trade-data/

MIETTINEN, E. (2011). SHORTENING THE SET-UP-TIME IN THE JUICE PRODUCTION PROCESS.


https://www.theseus.fi/bitstream/handle/10024/34712/Miettinen_Esa.pdf?sequence=1&isAllowe
d=y.

MPWANYA, M. F. (2005). INVENTORY MANAGEMENT AS A DETERMINANT FOR IMPROVEMENT OF


CUSTOMER SERVICE . Retrieved from
https://repository.up.ac.za/bitstream/handle/2263/30508/dissertation.pdf?sequence=1

Namagembe, S., & Munene, J. (2015). INFORMATION SHARING INVENTORY MANAGEMENT AND
CUSTOMER SATISFACTION. Retrieved from
file:///C:/Users/User/Downloads/INFORMATION_SHARING_INVENTORY_MANAGEMENT_AND_CUS
TO.pdf

NEDFI. (2017). PROJECT REPORT ON MULTI FRUIT JUICE & SQUASH. Retrieved from
https://www.nedfi.com/sites/default/files/Project_Profile/Multi%20Fruit%20Juice%20and%20Squa
sh.pdf

Nemati, S. A., & Mangaladurai, D. (2013). Impact of Enterprise Resource Planning in Supply Chain
Management. Retrieved from http://bada.hb.se/bitstream/2320/13316/1/Nemati%20Durai.pdf

NOWOTYŃSKA, I. (2013). AN APPLICATION OF XYZ ANALYSIS IN COMPANY STOCK MANAGEMENT.


Retrieved from http://doi.prz.edu.pl/pl/pdf/zim/43

Ogbo, A., & Ukpere, W. (2014). The Impact of Effective Inventory Control Management on Organisational
Performance. Retrieved from file:///C:/Users/User/Downloads/2873-11299-1-PB.pdfOgbo7up.pdf

Oracle. (1999). Oracle®Process Manufacturing MPS/MRP. Retrieved from


https://docs.oracle.com/cd/A60725_05/pdf/gemmsmr.pdf

Ovidiu, S., & Dascalu, C. (2010). THE ADVANTAGES AND RISKS OF USING AN ERP SYSTEM IN THE CONTEXT
GLOBALIZATION. Retrieved from http://modtech.ro/international-
journal/vol2no22010/Ovidiu_Sava.pdf

Pagliarussi, M., Morabito, R., & Santos, M. (2015). Optimizing the production scheduling of fruit juice
beverages using mixed integer programming models. Retrieved from
http://www.scielo.br/pdf/gp/2016nahead/en_0104-530X-gp-0104-530X2288-15.pdf

ProcessPro. (2017). Craft Juice Manufacturer Implements ProcessPro ERP Software. Retrieved from
https://www.processproerp.com/press/craft-juice-manufacturer-implements-processpro-erp-
software

Pullman, M., & Zhaohui, W. (2012). Food Supply Chain Management. New York: Routledge. Retrieved from
https://books.google.com.bh/books?hl=en&lr=&id=G4moAgAAQBAJ&oi=fnd&pg=PP1&dq=food+su
pply+chain+management:+economic,+social+and+environmental+perspectives&ots=jbpioSY5LV&si
g=qwvhIjADAoEp0aEDTSjHjtYGIQ8&redir_esc=y#v=onepage&q=safety%20stock&f=false
Quintiq. (2014). Drive profitable growth with superior supply chain planning. Retrieved from
https://www.3ds.com/fileadmin/Industries/Consumer-Packaged-Goods-
Retail/Pdf/Whitepapers/drive-profitable-growth-wp-cpgr.pdf

Ruteri, J. M. (2009). Supply Chain Management and Challenges Facing the Food Industry Sector in Tanzania.
Retrieved from file:///C:/Users/User/Downloads/3764.pdf

Salem, S., & Mazhar, S. (2014). The Benefits of the Application of Activity Based Cost System Field Study on
Manufacturing Companies Operating In Allahabad City – India. Retrieved from
https://pdfs.semanticscholar.org/3c86/1ec9c1c78866dfc5fe3fefed5998b50feb24.pdf

SINGLETON, C. A. (2010). Improving inventory management policies and establishing raw material stock
levels . Retrieved from
https://repository.up.ac.za/bitstream/handle/2263/16441/Singleton_Improving%282010%29.pdf?s
equence=1&isAllowed=y

SMEDA. (2007). Fruit Juice Manufacturing. Retrieved from


http://www.amis.pk/files/PrefeasibilityStudies/SMEDA%20Fruit%20Juice%20Processing.pdf

Springer. (2014). Basic Concepts in Inventory Management. Retrieved from


file:///C:/Users/User/Downloads/9788132219699-c2%20(2).pdf

Štrbac, M., & Savić, M. (2010). CONSUMPTION AND INDUSTRIAL DEMAND FOR FRUIT JUICES AND
CONCENTRATES. Retrieved from
http://ageconsearch.umn.edu/bitstream/245199/2/Article%207.pdf

Tanna, J. (2017). MANUFACTURING RESOURCE PLANNING. Retrieved from


file:///C:/Users/User/Downloads/eeng-37-20171.pdf

Tetra Pak. (2018). Principles of processing orange juice. Retrieved from


http://orangebook.tetrapak.com/chapter/principles-processing-orange-juice

TreeTop. (2017). STORAGE/SHELF LIFE RECOMMENDATIONS. Retrieved from


http://foodingredients.treetop.com/Assets/Documents/Regulatory%20Docs/Quality%20Regulatory
%20Docs/Storage-Shelf-life.pdf

Zekri, M. (2011). Factors affecting citrus production and quality. Retrieved from
http://www.crec.ifas.ufl.edu/extension/trade_journals/2011/2011_dec_factors_citrus.pdf
Met criteria to an Met criteria to a very Met criteria to a Did not meet
excellent standard good standard satisfactory standard Criteria
A B C F
(30 – 25.5) (25.4 – 21) (20.9 - 18) (17.9 - 0)
(20 – 17) (16.9 – 14) (13.9 - 12) (11.9 – 0)
(10 – 8.5) (8.4 – 7) (6.9 - 6) (5.9 - 0)
All types of inventories are All types of inventories are Most types of inventories Some types of inventories
identified and excellently identified and well are identified and have not been identified
Inventory described. described. described. and/or not adequately
identification Importance of inventory Importance of inventory Importance of inventory described
management and the management and the management and the The importance of
reasons a company need reasons a company need reasons a company need inventory management
30 Marks to have inventory are to have inventory are well to have inventory are and the need to hold
excellently explained. explained. somewhat explained. inventory are poorly Commented [A32]: WD 28
described.
Factors affecting Inventory Main factors affecting Some important factors Only few factors are
Factors Levels excellently cover Inventory Levels are affecting Inventory Levels mentioned
impacting the requested areas, in the explained in the context of are missing, and/or explanations are
Inventory context of the case study. the case study. or explanations do not not adequate.
Explanations are of high Explanations are of good relate to the context of the
Levels
standard and demonstrate standard and demonstrate case study or explanations
an excellent and deep a good overall demonstrate a basic Commented [A33]: VG 27
30 Marks understanding. understanding. understanding of the
concepts.
Strategies are identified Some strategies are Some major strategies are Only few strategies are
and excellently described. identified and properly missing, mentioned
Advantages/disadvantages described. or explanations do not and/or discussion is not
and ease/difficulty to put Advantages/disadvantages relate to the context of the adequate.
Strategies for these strategies in place and ease/difficulty to put case study
Inventory are excellently discussed. these strategies in place or
Explanations are properly are appropriately advantages/disadvantages
Management
linked to the case study discussed. and ease/difficulty to put
and demonstrate an Explanations are properly these strategies in place
30 Marks excellent and deep linked to the case study are not discussed
understanding. and demonstrate a good or explanations Commented [A34]: What you presented was good , but I
overall understanding. demonstrate a basic needed you to relate it to BOB’s 23
understanding of the
concepts.
Referencing All references are Most references are References used are References used are
formatting and comprehensive, support comprehensive and for the satisfactory but could have irrelevant and not of good
theories and effectively most part have been been used better to quality. References are
Layout and use
used. APA referencing effectively used. APA support theories. APA not effectively used and
of references correct referencing mostly correct. referencing partially APA referencing is Commented [A35]: 9
correct. incorrect.
10 Marks