Which type of inventory system would you use in the following situations, and why?

 Discussion topic and question (just a few paragraphs are required, doesn’t need to be too long)

Part 1:

Which type of inventory system would you use in the following situations, and why?

1. Supplying your kitchen with fresh food
2. Obtaining a daily newspaper
3. Buying gas for your car

Part 2:

With so much productive capacity and room for expansion in the United States, why would a company based in the United States choose to purchase items from a foreign firm? Discuss the pros and cons.

Respond to two peers discussions below (just need a few sentences in the response)

Peer 1

For supplying my kitchen with food I would use a fixed order quantity as well as a fixed-time period model, because there are items that I  purchase weekly such as fresh fruits, bread, milk, and fresh salmon. There are also items that I purchase on a monthly basis like my dry goods, toiletries, shampoo/conditioners, diapers and wipes for my granddaughter and these all refer to a fixed-time period and fixed-order quantity. These items all below stock on a weekly basis and has a reorder point of one week in my kitchen. 

Obtaining a newspaper for me would fall under a fixed-time order because I only purchase the weekend subscription and I purchase it for a discounted rate of three months at a time.

Buying gas I would use fixed- order quantity model  because I don’t give my light a chance to go red but I do I refill my tank  in intervals and for me that is when I get to the 1/2 tank mark.  With this method I have control of when to order and how much I will order each time I pull up to the tank.

http://www.informit.com/articles/article.aspx?p=2167438&seqNum=7 (Links to an external site.)

 Peer 2:

   Fixed-order quantity inventory system is used when supplying my kitchen with fresh foods and ensures needed items are in stock and ready for use during the week.(Jacobs, 2020) Fresh foods are continually monitored and when a item is below a certain quantity that is needed for the week, those items are put on the grocery list to be bought. The fixed-order quantity inventory system ensures the regular replenishment of needed fresh food items are in the kitchen and are maintained in stock. Accurate inventory management through the fixed-order quantity inventory system is used to optimize maximum efficiency.

       The most efficient way to ensure and maintain the continuous delivery of a daily newspaper would be with the Fixed-time period inventory. To maintain the optimal level of a daily newspaper, the paper needs to be periodically reordered at certain interval times to ensure the paper is available and ready to read.(Jacobs, 2020) The paper can be ordered for certain days of the week, for a certain interval of time. At the end of the fixed-time period, inventory can be readjusted to meet the demand, for how many days and for how long of interval to order to ensure optimal levels of daily delivered newspapers.

       Buying gas for my car would be under the fixed-order quantity inventory system. I continually monitor the gas gauge on a daily basis and when the gas gauge falls below the quantity of a quarter tank of gas, I refill the tank with gas. Accurately monitoring the inventory of the quantity of gas in the cars tank, prevents me from having a bad day.

       American companies are outsourcing to foreign firms to make the most out of the company’s production capacity. Labor costs can be a company’s largest expense, through outsourcing to foreign firms with lower labor costs, production of goods can be attained at a lower cost, increasing revenue. The disadvantages of language barriers, time zone differences, quality, and the negative impact on the company culture need to be carefully examined by managers to see if outsourcing optimizes the corporations’s efficiency, revenue and strategy.(Regoli, 2020)

Reference

Jacobs, F.R., & Chase, R.B. (2020). Operations and Supply Chain Management. New York:

       McGraw-Hill Education.

Regoli, Esq., N. (2020). 15 Pros and Cons of Outsourcing Jobs to Foreign Countries. Retrieved

       on February 13, 2020 from, https://futureofworking.com/15-pros-and-cons-of-

ANSWER

Discussion

Part 1

            I would need a fixed-order quantity model to supply my kitchen with fresh food since the activity involves inventory dropping to a specified availability level. In this case, assessing fruits and vegetables (fresh food) depends on the level of consumption, triggering the need to access more products because of the reduction in inventory.

           When obtaining a newspaper, I would use a fixed-time period model because the newspaper is demanded daily, and it should be bought at a specified time. Here, time is daily and is also based on quality.

           Buying gas for the car means I will use the fixed-order quantity model because refilling the fuel is done once there is a trigger once the re-filling location is predetermined. For others, a point of reordering could be half the tank, while for others, it is until the low fuel signal turns on. 

Part 1

           Using foreign firms can provide United States firms with more alternatives in supplier selection. Some of the pros include more alternatives/choices, the potential reduction in costs when it comes to availability of materials, production, transportation, and distribution, including the opportunity to move to or access foreign markets. On the other hand, the cons comprise increased distance costs, communication challenges because of culture, distance, and technology. Other issues include government regulations, customs, and political turmoil and instability.

Peer Response 1

           You opted for a fixed order quantity and fixed-time period models when supplying fresh food to your kitchen, which is correct as the food types require refilling on specified periods and certain amounts. At the same time, you considered a time factor to be important, which I think is relevant in this case, especially when you are buying newspapers every week. Lastly, you are privy of the fact that buying gas depends on the amount left in the tank, and whether there is a signal showing low gas levels. This explains why you chose to use a fixed-order quantity model.

Peer Response 2             Your understanding of the fixed-order quantity inventory system is critical, especially in terms of kitchen supplies with fresh foods. At the same time, since the newspaper needs periodic delivery, it is clear that sometimes the right inventory…