How Do Organizations Use Supply Management?

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As most organizations grow, the techniques of how the organization acquires their supplies and allocates its goods; should grow. Using some of the vastly different ways that an organization could implement to keep an eye on how they are doing, for example the amount of profit being made or the amount of product being produced and sold.. An organization has to make sure that they keep track of the amount of inventory to ensure the amount of orders they will have to complete. But it’s not just about the profit an organization makes. For instance not only do organizations use supply management but cities and states do as well during crises such as natural disasters. To date, the owner of Realco, an organization that produces bread makers…show more content…
Management should always know how much inventory they have so that they know how much they can promise (Ware & Fogarty, 1990). Realco has over promised for the first three weeks, but having the extra inventory and current production levels the orders can still be filled. In my opinion, I believe that the Realco Organization should update their forecasting. An organization can only make a certain amount of items each day whereas, the forecasting of promised shipments could be easily adjusted. The way that Jack is promising orders is one way to do it. Some of the advantages are that he does not have to worry about forecast models or projections; he just knows how long it takes to make the bread makers and adds a buffer week so there is little to no work involved. There are some disadvantages that could come back and hurt them if they are not careful. One of which is not being entirely sure how much you have promised. If Jack is not careful he could end up overbooking for more than the organizations could handle and thus the organizations would always be trying to catch up and would not have a chance to build up inventory for times that the machines brake down or have to be on maintenance. For instance, if the organizations did not have the 7,000 bread makers in inventory than they would have been overbook and would not
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