Kuiper Leda Problem Solution
Problem Solution: Kuiper Leda
Kuiper Leda is a manufacturer of ECU’s and RFID’s. The company also manufactures a microchip used in the production of the ECU’s. Midland Motors, a large auto maker has placed an order consisting of 250,000 ECU’s and 35,000 RFID’s. The order is for a year with a production schedule by quarter and lead time required. Currently, Kuiper Leda does not have sufficient capacity to fulfill the order by manufacturing both products in-house. To make an effective and correct business decision on whether to accept the order above its regular orders, the company must understand and evaluate the principles of inventory management, the effects of inventory on cash and cost of goods, make business decisions regarding the components of the supply chain, consider bottlenecks affect on capacity, and the relationship between forecasting and just-in-time concepts, all while considering the stakeholders in the scenario. It must create a comprehensive plan of implementation and measurement to ensure success.
Situation Analysis
Issue and Opportunity Identification
Kuiper Leda has a number of suppliers that provide component parts used in its manufacturing process of both the ECU’s and RFID’s. The company’s raw materials inventory is not completely controlled and enhancements to the inventory and ordering process would benefit the company by reducing costs and providing relevant information which can also be used in other business decisions. Classifying inventory according to the ABC classification segmentation is a way to group inventories according to certain criteria. “The inventory items are divided into three categories (A, B, and C), according to a criterion such as revenue generation, turnover, or value” (Business, 2008). Once the classifications are completed important information is ascertained to enhance several facets of the supply chain as “ the results of the analysis provide valuable information that can be used to determine how each part...
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