Case Study Trans European Plastics

If the operation have not reordered all the goods they need, this can lead to irritated customers and lower revenue for the operation.

The retailers had to estimate their customers’ demands well in advance of the selling season and place bulk orders for each season’s inventory. This involved high risk for the retailers as over-estimation would lead to unsold stock; whereas under-estimation led to stock outs and loss of potential sales.

company’s finished goods inventory has shot up to a 60 days supply – twice the normal level. In addition,

* Peak seasons: During peak seasons when demand exceeds capacity buyers have lower bargaining power as opposed to when ships offer last minute discounts in order to avoid

Plastic – an American-made synthetic material, renowned and praised for its almost indestructible quality and versatility, yet on the contrary has had detrimental consequences on our environment and ourselves. It is quite amazing to observe how plastic has completely changed our way of life. In Susan Freinkel’s book “Plastic: a Toxic Love Story” she writes about the effects of plastic on our world. The author points out, a commonly overlooked fact, that plastic is literally everywhere. Plastic is in the clothes we wear, the cars we drive, the cups we drink from, and sometimes even the ground we walk on. Two chemical bonds made in a laboratory have forever changed the way we live, through small commodities like

For instance (ceteris paribus), if the transportation of the HP products were air shipped, and the lead time passed from four and a half weeks to three days, logically stock levels would decrease. The same would happen if we reduce the time between orders or the level of satisfaction that we want to assurance to our customers.

The customers, wholesalers and retailers may order in large quantities with the expectation that they will receive a greater allocation of products that are in short supply. The impact on the supply chain is significant as the forecasted demand is greatly, and unrealistically, increased with these inflated orders. Eventually orders disappear and cancellations pour in, making it impossible for the manufacturer to determine the real demand for its products

As the lead for roll stock I help manage our relationships with International Paper (IP) and Green Bay Packaging. This allows me to ensure that we are printing enough roll stock in time to meet brewery needs, as well as, aid in the runout process as we transition through a graphics change or promo. In order to meet this goal, I have been reviewing IP’s Miller 6 inventories bi-weekly and started creating a list of orders and identifying the cadence of these orders. By doing this, I am trying to more closely align with how our fiber commodity operates and reduce the amount of time I am spending on this review. In addition to this review, I have been reviewing the Green Bay packaging and the IP Coors 2 inventories weekly to ensure accuracy there as well. This

Also, due to the requirement that AEO must enter in to production agreements with suppliers far in advance in order to guarantee inventory, they are even more exposed to fluctuations in consumer preference or economic changes such as a drop in consumer confidence or discretionary spending. AEO appears to typically have an inventory turnover ratio of approximately 6, which is lower than the industry average of 10. This means that AEO on average takes longer to sell its inventory and means that they must forecast demand effectively or risk excess inventory. In terms of a material misstatement, it is imperative that

Low Inventory Trunover: the product sits 255 days on average in inventory before being sold;

Lead time varies significantly, which affects the inventory cycle. The plant has to set a safety stock that will protect the production against stock outs, vehicle breakdowns, weather related delays and the shortage of supply from farmers and hogs barns.

In Septe mber of 1986 Michael Smith, Division Manager of Brunswick Pla stics, faced an important

– Irregular demand can be demand which is not consistent. For example, demand of coats, jackets in winter usually increases.

Just-in-time delivery needs good collaboration with vendors of distribution services and of products. The distributor needs a continuity of demand and the chance to define routes, loads and schedules well ahead. By working toward longer-terms, higher-volume procurements with vendors, prices can be cut due to larger transport volume over a long period of time. Just-in-time delivery will cut down the operating costs if the business is substantial for the distribution partner. Just in time delivery needs more frequent deliveries from vendors however it does not voluntarily imply higher transportation costs.

An alternative suggested by specialists included the initiation of a new cheap lining for food and drink tins. A lining that would prevent bacteria and