Which of the following are improvement driven reasons to outsource?
An improvement-driven reason for outsourcing is that it can increase product and service value, customer satisfaction, and shareholder value. A financially-driven reason for outsourcing is that it can help gain access to new markets, especially in developing countries.
Why is it expensive to carry inventories?
The cost of carrying inventory is used to help companies determine how much profit can be made on current inventory. The cost is what a business will incur over a certain period of time, to hold and store its inventory. The carrying cost of inventory is often described as a percentage of the inventory value.
What are some reasons that a firm might outsource logistics?
7 Reasons to Outsource Logistics Operations:
- Focus on Core Business.
- Gain Access to Technology.
- Drive Efficiency and Cost Savings.
- Improve Risk Management.
- Acquire Custom Solutions.
- Develop Internal Staff.
- Improve Customer Satisfaction.
Why is holding inventory bad?
Excess inventory can lead to poor quality goods and degradation. If you’ve got high levels of excess stock, the chances are you have low inventory turnover, which means you’re not turning all your stock on a regular basis. Unfortunately, excess stock that sits on warehouse shelves can begin to deteriorate and perish.
What are inventory holding costs?
Holding costs are those associated with storing inventory that remains unsold. These costs are one component of total inventory costs, along with ordering and shortage costs. A firm’s holding costs include the price of goods damaged or spoiled, as well as that of storage space, labor, and insurance.
Which of the following is not included as an inventory holding cost?
560-561) Which of the following is not included as an inventory holding cost? Holding costs include the costs for storage facilities, handling, insurance, pilferage, breakage, obsolescence, depreciation, taxes, and the opportunity cost of capital.
What are the two types of supply chains?
The 2 Types of Supply Chains
| Reactive Supply Chain Strategy | Data-Driven Supply Chain Strategy |
|---|---|
| Operational improvements based on guesswork or imitating competitors | A data-driven approach helps even best-in-class manufacturing operations find new ways to improve efficiency[iii] |
What type of products have low profit margins long product life and predictable demand?
Functional products satisfy basic needs, which don’t change much over time. They have stable, predictable demand and long life cycles. The stable nature of their demand invites competition, which often leads to low profit margins.
What can be outsourced?
10 Small Business Functions That Can Be Easily Outsourced
- Accounting. Accounting is one of the most common areas where small businesses choose to outsource.
- Marketing. When it’s time to grow your business, an outside marketing firm can help you do it quickly.
- Sales.
- IT Management.
- Administrative Tasks.
- Customer Service.
- Manufacturing.
- Shipping and Logistics.
Is the practice whereby a firm charges differential prices to maximize profits?
By definition, price discrimination is the practice whereby a firm charges differential prices to maximize profits.
What is a benefit of having an efficient supply chain?
Improved product and material flow Effective supply chain management enables companies to improve product flow through accurate demand and sales forecasting and also improve inventory management to arrest the bullwhip effect and avoid underproduction.
How can outsourcing negatively affect different countries?
If jobs are outsourced to different countries, morale in the workplace would suffer significantly and that would bring bad publicity to the company (Bucki). Outsourcing has caused high unemployment, loss of income and loss of competitive advantage, leaving people without financial support and employment.
What is the average aggregate inventory value?
“Average aggregate inventory value” is a term used to describe all of the inventory held in stock, which includes raw materials, work in process and finished goods, all valued at cost.
What are the advantages and disadvantages of inventory?
If inventory moves regularly and quickly, business owners are likely to carry some excess inventory of the most popular items.
- Advantage: Wholesale Pricing.
- Advantage: Fast Fulfillment.
- Advantage: Low Risk of Shortages.
- Advantage: Full Shelves.
- Disadvantage: Obsolete Inventory.
- Disadvantage: Storage Costs.
When should you avoid holding inventory?
Any excess inventory will result in incremental costs of maintaining inventory and affects the financials of the company as it blocks working capital. Under inventory on the other hand can seriously hamper the market share. Any customer order that is not fulfilled due to a stock out is not at all a good sign.
When demand is steady cycle inventory and lot size are related as?
Question: T/F When Demand Is Steady, Cycle Inventory And Lot Size Are Related As Follows: Lot Size = Cycle Inventory/2 T/F Fixed Ordering Cost Is All Costs That Do Not Change With Lot Size But Incurred Each Time An Order Is Placed The Total Annual Cost Is The Sum Of Annual Material Cost, Annual Order Cost, And Annual …
Can all functions be outsourced?
Every company process that can be performed from an off-the-shore location can be outsourced. This includes functions such as payroll, transaction processing, transcription services, call center services, image manipulation services, order and inventory management, just to name a few.
What Cannot be outsourced?
Here are some example tasks that should not be outsourced: Company culture and Professional Development. This cannot be forced; it is because only your in-house staffs have the drive and determination of what you call as the “feel” of the office. These two things must be aligned with your people and your business.
What is the risk of holding inventory?
Holding Inventory may increase the risk of decline in price. This may be due to increase in the supply of products in market by competitors, introduction of a new competitive product, competitive pricing policy of competitors etc.