Inventory Management: Model And Empirical Analysis Essay


Discuss about the Inventory Management for Model and Empirical Analysis.



This report is developed on the concept of the inventory management. As per the case study, it can be observed that Jason Roberts is the operation manager of Wescott organisation. It is required to Jason to construct master schedule. It will be beneficial to maintain the promise for the delivery of the orders, components of the orders as well as the plan capacity. In this connection, Humbly, the previous instructor of this company asked to Jason to gather some necessary information. Therefore, Jason needed to recognise the capacity problem and needed to list all of the product models. Based on the collected data, this report has discussed the nature and the predicted sources of the mentioned problems. In addition, this study is also helpful to estimate the rough-cut capacity situation. Moreover, using this accumulating information, Jason has developed an appropriate complete plan, which is based upon the future predicted value. In this connection, this report has been demonstrated the master scheduling approach.

Discussion of the nature and the probable sources of the problem

As per the case study, it can be observed that Wescott has been suffering from the problem of delaying of delivery of the orders to the consumers. This proves that the organisation is unable to meet the promise. According to Chan & Prakash (2012), there is a shortcoming between the anticipation and the actual orders. Moreover, in case of the production of Wescott, the shortages were related to the subassemblies or the components. In this respect, it can be assumed that the controller of the organisation (Jake Marris) was grumbling and therefore, the ratio of the inventory turn was lower than 3.5. It was unsatisfactory and the costing of the production of the organisation was obtaining lots of money (Bhakoo, Singh & Sohal 2012).

On the other hand, Jason also identified the lack of working of overtime as the possible resources of the difficulties. In this connection, it can be seen that although the employees are highly qualified and efficient, they are reluctant to work over time. On the other hand, due to the lack of union among the workers within the organisation, the workers were not willing to work over time (Chen & Simchi-Levi 2012). However, the present situation is that the workers make group and demanded for a better remuneration against the overtime working. Without getting of proper remuneration, they decided to switch to the other organisation within this industry. In the words of Chan & Prakash (2012), the company has decided that each of the employees can do four hours per week as over time working in case of the emergency. As, stated by Ali et al. (2013) the workers will receive extra payment for over time working.

In addition, Jason used to make a master schedule in order to make delivery the products as per the proposed date. According to this master schedule plan, Jason can observe the availability of the equipments and the stock of capital to run the manufacturing process appropriately. In this sequence, it can be stated that as the company cannot deliver the products as per the proposals, it is seemed to be useful to serve their services to the consumers (Piramuthu & Zhou 2013).

Examine the rough-cut capacity situation and discussion the result


Lot size

On hand



















Therefore, from the above table it can be seen that predicted lot size was much higher whereas the delivered items were only 185, which very much lower compared to the 1120.

As it can be observed that due to delaying of delivery of the products to the customers, the customers were getting annoying and behaved badly with the sales and marketing manager. As a result, Randy Stockard identified that total sale of the organisation as going down. In order to mitigate the problem, as per the Humbly’s suggestion, Jason has tried to gather information, which would be helpful to evaluate the probable outcomes. As per the recommendation, Jason has selected work centre 12. There were five models such as A, B, C, D and E was manufacturing. It has been recognised that due to the lack of inventory or equipment, the company was unable to deliver the orders to the consumers (Ali et al. 2013). After the collection of data, it can be observed that run time per item was 3.7, 5.1, 4.3, 8.4 and 11.2 respectively. In addition, number of 150, 100, 120, 350 and 400 quantities has manufactured these five models. This refers that lot size is the total proposed manufacturing products by the buyers, which are needed to be delivered. This lot size is based upon the capacity of the run time. Nevertheless, due to the lack of equipments and due to the lack of overtime working, the work centre 12 could not deliver the products within the proposed time. In case of model A, it only delivered 10 products based on the expectation. Instead of this, model B and C could not deliver a single product whereas model D and E, was also manufactured below the expectations. Hence, this outcome of deliveries of the products ensures the reason why the consumers were reluctant to take the products and why the total sales of the company were going down (Huang & Van Mieghem 2014)

Again, from the accumulated data, it can be seen that forecast and the customers orders was not equal over the 10 weeks. It can be anticipated that the organisation can manufacture 45 products in each of the week. Moreover, the predicted value for all of the other models was assumed equal for 10 weeks. However, the actual production and the deliveries were gradually decreased for model A. This trend of the outcome is also equal for the other models.

Development of complete plan for Jason in future

According to Subramanian, Rawlings & Maravelias (2014), based on the given scenario, the company needs to aim to the development of the complete plan, which is needed to follow in the future. In addition, the company is required to construct an ideal master schedule to make the business successful.

Figure 1: Master schedule planning

(Source: Raviv & Kolka 2013)

The above figure depicted the ideal master schedule planning of a company. It depends upon some definite concepts such as production planning, inventory as well as capital data, consumers demand for a particular product, prediction.

In the words of Tan & Karabati (2013), master scheduling is necessary to build a complete plan for a business, which is developed based on the past data and knowledge. It is helpful to determine the running operations as well as the planning activities of a certain company. With the help of this master scheduling, the consumers and the organisation can recognise the difficulties and the shortcomings in case of manufacturing process. Based on this, the consumers can place the orders for the products. In this context, the batch size in needed to consider via the supply chain. This would maintain the smooth flow of manufacturing (Chen & Hu 2012).

Master scheduling is helpful to include the prediction of manufacturing of products. This will be helpful and motivate the workers to produce the customers’ orders within the proposed date. In addition, if there is shortage of the inventory as well as the capacity data, the organisation can recognise and then can mitigate the shortcomings to complete the manufacturing. As per the statement of de Vries (2013), Wescott requires to follow an appropriate production plan. This production plan is different for different organisation. Production planning is helpful to achieve the objectives of a business. The objectives such as productivity and the buyer’s satisfaction level can be estimated (Natarajan & Swaminathan 2014)


This report is helpful to identify the concept of inventory management and capacity management. In this respect, this study has discussed the concept with the help of an ideal example. As per the case study, it can be observed that due to the shortages of equipment, capacity the organisation was unable to deliver the products to the consumers within the proposed date. Hence, the total sale of the organisation was decreased. In order to identify the shortcomings, Jason has tried to collect information and tried to find out the relationship with the shortcomings of the organisation. In addition, this report is also beneficial to develop a master schedule plan, which can improve the current condition of Wescott. Master scheduling plan has been constructed based upon some specific contents, which has been discussed in this study.


After analysing the shortcomings of the business, it can be suggested that the mentioned organisation can develop and follow an ideal master scheduling plan. This plan can increase the productivity of the company. In addition, the consumers will be satisfied with their services. The forecasted data and the actual data of the manufacturing products will be closer. This indicates that the deliveries of the products will be within promised time. In this purpose, it can be recommended that the company require to follow a specific production plan to make a business fruitful. On the other hand, Wescott also need to pay proper remuneration to the workers for overtime working.


Ali, S. S., Madaan, J., Chan, F. T., & Kannan, S. (2013). Inventory management of perishable products: a time decay linked logistic approach. International Journal of Production Research, 51(13), 3864-3879.

Bhakoo, V., Singh, P., & Sohal, A. (2012). Collaborative management of inventory in Australian hospital supply chains: practices and issues. Supply Chain Management: An International Journal, 17(2), 217-230.

Chan, F. T., & Prakash, A. (2012). Inventory management in a lateral collaborative manufacturing supply chain: a simulation study. International Journal of Production Research, 50(16), 4670-4685.

Chen, X., & Hu, P. (2012). Joint pricing and inventory management with deterministic demand and costly price adjustment. Operations Research Letters, 40(5), 385-389.

Chen, X., & Simchi-Levi, D. (2012). Pricing and inventory management. The Oxford handbook of pricing management, 784-822.

de Vries, J. (2013). The influence of power and interest on designing inventory management systems. International Journal of Production Economics, 143(2), 233-241.

Huang, T., & Van Mieghem, J. A. (2014). Clickstream data and inventory management: Model and empirical analysis. Production and Operations Management, 23(3), 333-347.

Natarajan, K. V., & Swaminathan, J. M. (2014). Inventory management in humanitarian operations: Impact of amount, schedule, and uncertainty in funding. Manufacturing & Service Operations Management, 16(4), 595-603.

Piramuthu, S., & Zhou, W. (2013). RFID and perishable inventory management with shelf-space and freshness dependent demand. International Journal of Production Economics, 144(2), 635-640.

Raviv, T., & Kolka, O. (2013). Optimal inventory management of a bike-sharing station. IIE Transactions, 45(10), 1077-1093.

Subramanian, K., Rawlings, J. B., & Maravelias, C. T. (2014). Economic model predictive control for inventory management in supply chains. Computers & Chemical Engineering, 64, 71-80.

Tan, B., & Karabati, S. (2013). Retail inventory management with stock-out based dynamic demand substitution. International Journal of Production Economics, 145(1), 78-87.

How to cite this essay: