A firm makes and sells T-shirts in three different colors 1) Red, 2) Green, and
ID: 382046 • Letter: A
Question
A firm makes and sells T-shirts in three different colors 1) Red, 2) Green, and 3) Blue and each shirt is offered in four different sizes 1) Small, 2) Medium, 3) Large, and 4) X-Large. Each color of shirt uses a slightly different style with different assembly requirements. The firm produces its inventory in two-week cycles. The first week of production is dedicated to coloring the fabric. The second week of production is used to assemble the shirts. Over the summer selling season, they repeat this two-week cycle several times. This manufacturer has limited visibility of end-user demand and they are often unsure of what colors/sizes are selling faster than others.
The firm is suffering from both too much inventory of certain sizes/colors and too little of others. Which of the below strategies is the least helpful in helping the firm better match supply and demand.
A. Reduce the batch sizes of each shirt style to decrease the flow time of inventory through the production process.Explanation / Answer
The option D : Add additional t-shirt colors to the product line so that consumers are more likely to find a color they like is the least helpful in meeting the demand and the supply.
It is clear that the demand is erratic and forecasting is a problem. Already there are too many variables like colour, shade, size and style. Adding more colours will further complicate and slow down the process.
On the other hand, lets study the other options :
a) Producing in smaller lots will help to reduce unwanted inventory and produce as per the demand.
b) By removing the style variable, it is possible to smartly alter the production process which can help partly ready product. Once there is a requirement, this can be used to dye and provide.
c) Additional production run during season time can help to increase the capacity to meet the higher demand.
e) Gathering real time information can help to improve the demand estimation more accurately and this improved forecasting information can be used to plan productions schedules better. With IT, this is quite possible.
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