Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.
Compact case
Authors: Richard Burgess (Air Liquide Healthcare); Robert Burgess (Georgia State University)
Published in: 2001

Abstract

This case is designed to teach that company performance depends on both the design of the production planning system and the ability of line management to perform to the production plans of that system. The insights developed in this case study can be applied generically for any Make-to-Stock Production company where stock out of finished goods by the supplier results in lost sales (backorders are not permissible). The problem faced by BBF is two-fold: the dollars invested in Finished Goods Inventory (FGI) is too high while the actual customer service level of 92% has been too low. To the casual observer, the solution to the first problem seems to be to reduce inventory. However, the solution to the second problem appears to be an increase of the amount of FGI to achieve the CEO''s desire of 95.4% customer service level. Hence, the production planner''s quandary. This case was sponsored by the Indiana University CIBER Case Collection.
Location:
Other setting(s):
Mid-1990s

About

Abstract

This case is designed to teach that company performance depends on both the design of the production planning system and the ability of line management to perform to the production plans of that system. The insights developed in this case study can be applied generically for any Make-to-Stock Production company where stock out of finished goods by the supplier results in lost sales (backorders are not permissible). The problem faced by BBF is two-fold: the dollars invested in Finished Goods Inventory (FGI) is too high while the actual customer service level of 92% has been too low. To the casual observer, the solution to the first problem seems to be to reduce inventory. However, the solution to the second problem appears to be an increase of the amount of FGI to achieve the CEO''s desire of 95.4% customer service level. Hence, the production planner''s quandary. This case was sponsored by the Indiana University CIBER Case Collection.

Settings

Location:
Other setting(s):
Mid-1990s

Related