Managing the supply chain Essay Example | Topics and Well Written Essays - 750 words

Managing the supply chain - Essay Example The theoretical opposite of this is the Material Requirements Production (MRP) system, which operates using more of a ‘push’ approach. It gives more importance to predicting the raw material that will be required for production, through a budget costing approach. This means the goods are produced in advance and stored until they are demanded and consequently sold. These two methods teach very different styles of supply chain management, and yet neither of them has lost their value in the field of supply chain management due to their unique advantages for different types of goods. Furthermore, there are even some products, the production of which may benefit from the employment of a hybrid of these two methods instead of just one strict methodology. Each of these two systems is still in existence because they are very useful for products of different nature. JIT is system which is more useful goods which are of a perishable nature, or are in danger of not being demanded l ater on. For example, considering a factory which produces food products which are not made with preservatives will employ the system of JIT in its supply chain. This is because JIT ensures minimum wastage of goods produced (Hirano, 2009). The protocol it follows for production is that the production chain waits to receive an order from the customer, and only then starts the process of production. If, for example, a firm that implements JIT receives the order for a thousand units of the product, they will not already have the product in stock. Instead, they will begin their manufacturing after the order is received and confirmed, which means that these thousand units will be produced only after the order. This reduces the chance that there will be some units, which will lie in stock after production because they are not in demand. Such a situation would lead to the good either spoiling, due to its perishable nature, or becoming obsolete in sometime. The perishable goods refer mostly to food products or other goods which use perishable materials in their production, thus rendering the nature of the good prone to expiry. This is relevant to consumer goods other than food also, such as beauty products or lotions, all of which have set expiry dates. JIT is useful for such products, because otherwise if the goods are left in stock for too long, they expire and cause losses to the manufacturer. This is also relevant to durable goods, which run the risk of becoming obsolete due the continuous technological advancement that is taking place, such as computers. Thus, such goods also need to be produced in a supply chain implementing JIT, since if the goods stored in stock become obsolete, they will become useless and cause loss to the manufacturer. Another advantage of the JIT system is that it minimizes the need for storage space for the company. A disadvantage, however is that the company is forced to streamline their production method in order meet each demand in an efficient and timely manner, so that the customer does not have to wait for unreasonable amounts of time. In contrast, the MRP system ensures that the customer receives an immediate response to their demand (Hall, 2008). This system implements budgeted production, which forecasts the demand for goods it will have to meet in the near future, and then produces accordingly. The advantage of this system is it saves time and provides a

FIN Unit1 - Individual Project Research Paper Example | Topics and Well Written Essays - 1250 words

FIN Unit1 - Individual Project - Research Paper Example The proposal will consider each country’s trade policies, currencies and culture. Turkey and Italy: Review This part of the assignment will discuss about the currency, trade policy and culture of a turkey and Italy. Currency of two countries: Advantages and Disadvantages Italy is the member of European Union. Euro is the currency of Italy. This currency has both advantages and disadvantages. The advantages of this currency outweigh the disadvantages. Euro is the single currency between the members of European Union. It eradicates the need of currency exchanging between Economic and monetary members. Economic and Monetary members saved an average of 30 billion US dollar in a year by switching to this currency. Elimination of volatility of currency exchange rate between the members of European Union is another advantage of Euro. On the other hand, switching to a single currency forced the members of European Union to give up their rights to the change of monetary and economic po licies. It is the major disadvantage of Euro. Despite the disadvantage, the members of European Union made it easy to sell and purchase the goods cross borders. Moreover, the lending and borrowing become easy through the concept of this single currency. In addition, fixed exchange rate of 2.25% provides significant benefits to the members of European Nation. This benefit includes the promotion of international investment and trade. In developing countries this benefit can enhance economic growth. Recent financial crisis is the major concern for Italy. On the other hand, Turkey is not the member of European Union. The country uses Turkish Lira as their major currency. The currency of Turkey has several bilateral tax treaties and investment with US that can ensure the elimination of double taxation. Moreover, this currency gives guarantee repatriation of capital in the convertible currencies. The central bank of Turkey has tightened the monetary policy after the inflation rate increas ed to 10.5% in the year 2011. The central bank of the Republic of Turkey provides several flexible policies, such as foreign exchange auctions, interest rate corridor, and adjustments to the repo auctions and requirements. These policies will help to stabilize the Turkish Lira. The currency recently has depreciated by 25%. EU and Turkey: Trade Policies Europe is considered as the leading global trading block. It accounts for one-fifth of the global trade. Each and every trade policy is developed for the 27 member states among the European Union. These members generally share a single market and border. It helps to empower European Commission when it talks with all the partners of European Union. The commission effectively acts as the negotiator for a specific negotiation process. This commission represents the members of European Union in the World Trade Organization. The European Commission provides unity to mould a key open for global trading process that offers fair rule. However , the trade policy of Europe helps several European organizations to generate employment and significant investment opportunities. Several new markets for the European E\exports are effectively open through the trade policy of Europe. The European Commission works on daily basis to remove unwanted export barriers. Moreover, effective and potential opportunities in European investment are motivating several