Case study:
One of the new ventures that Health Buddy Shop is providing prepared food for people who are into keto diet. The management will have its operations meeting sometime next time and it needs to approve its operational expenses which will include the budget for eparing their meal according to the required calaries per person to attain a particular weight. Mr. Angelo has been tasked to handle the operations including the logistics part which includes the supplies and raw materials. Initially, Mr Angelo has come from similar restaurant where ordering on a monthly basis is effective for them in terms of meeting customer requiremnets and meeting the least cost. With this experience, Mr Angelo followed the same practices from that previous experience and began ordering food boxes, disposable spoon and fork and paper cups monthly with a fixed order quantity of 2,000 pcs per order. Annual demand for the food is also equated to the usage and demand for the said materials which is 24,000 pcs annually. Food boxes costs BD 0.150, spoon and fork is BD0.30 while paper cups cost BD 0.20 Maintaing such a volume of materials costs the company BD 5.00 while the cost of ordering from supplier is Bd 12. Mr Angelo wants to ensure that what he will present to the management is correct so he has asked his other friends to check and validate which in return agreed with his strategy. At its operations meeting, Mr. Angelo intend to declare that the practice is going to save money for the company. However, just before the operations meeting, a trainee named Mr. Rey has come and has been instructed to assess the operations and propose possible improvements that will ensure product quality and at the same time saving money . Mr . Rey, who is a graduating student of MS Manufacturing Management saw that there is something wrong with the proposed strategy that Mr. Angelo will implement in terms of order quantity. He objects the practice that is being done when it comes to ordering the food boxes, spoon and for and paper cups.
Answer the following Questions.
- What is the impact that Mr Angelo’s strategy on the total cost
- What is the impact of Rey’s idea in terms of ordering inventories.
- Having seen the results in Q1 and Q2, what can you conclude to be the best strategy that the company should use? Support your answer with data
Case study:
One of the new ventures that Health Buddy Shop is providing prepared food for people who are into keto diet. The management will have its operations meeting sometime next time and it needs to approve its operational expenses which will include the budget for eparing their meal according to the required calaries per person to attain a particular weight. Mr. Angelo has been tasked to handle the operations including the logistics part which includes the supplies and raw materials. Initially, Mr Angelo has come from similar restaurant where ordering on a monthly basis is effective for them in terms of meeting customer requiremnets and meeting the least cost. With this experience, Mr Angelo followed the same practices from that previous experience and began ordering food boxes, disposable spoon and fork and paper cups monthly with a fixed order quantity of 2,000 pcs per order. Annual demand for the food is also equated to the usage and demand for the said materials which is 24,000 pcs annually. Food boxes costs BD 0.150, spoon and fork is BD0.30 while paper cups cost BD 0.20 Maintaing such a volume of materials costs the company BD 5.00 while the cost of ordering from supplier is Bd 12. Mr Angelo wants to ensure that what he will present to the management is correct so he has asked his other friends to check and validate which in return agreed with his strategy. At its operations meeting, Mr. Angelo intend to declare that the practice is going to save money for the company. However, just before the operations meeting, a trainee named Mr. Rey has come and has been instructed to assess the operations and propose possible improvements that will ensure product quality and at the same time saving money . Mr . Rey, who is a graduating student of MS Manufacturing Management saw that there is something wrong with the proposed strategy that Mr. Angelo will implement in terms of order quantity. He objects the practice that is being done when it comes to ordering the food boxes, spoon and for and paper cups.
Answer the following Questions.
- What is the impact that Mr Angelo’s strategy on the total cost
- What is the impact of Rey’s idea in terms of ordering inventories.
- Having seen the results in Q1 and Q2, what can you conclude to be the best strategy that the company should use? Support your answer with data
