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Q.12DQ

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Operations And Supply Chain Management
Found in: Page 288
Operations And Supply Chain Management

Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

Short Answer

How does seasonal variability in demand affect the flow and waiting time through a process? How might a company respond to reduce the effect of this variability?

Seasonal variation is a variable factor in predicting time-series research, and it relates to the phenomena in which item manufacturing as well as plan fluctuates according to a seasonal pattern based on the item's attributes.

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Step by Step Solution

Step 1: Seasonal variability in demand affects the flow and waiting time through a process

The flow, as well as waiting time, would be affected by seasonal variations in demand. When demand peaks during the busy season, the business with inadequate capability will face the majority of the challenges. When demand is volatile, it is hard to anticipate manufacturing. As a result, when the company is unable to anticipate output, the procedure that comprises a succession of ongoing actions may face difficulties.

Step 2: A company responds to reduce the effect of this variability

Production must be changed to account for seasonal variations in demand. When there is a rise in demand, manufacturing must grow, as well as conversely. When there is a rise in demand, the stream of the procedure increases, reducing the waiting time. To mitigate the impact of fluctuation, the organization might enhance its capacity. However, it is too costly. As a result, they may employ make-to-stock, which will benefit them when need fluctuates.

In a make-to-order approach, the corporation might strive to stabilize requirement by giving promotions as well as discount cost structure during normally sluggish time frames to transfer a few peak need to off-peak times.

Some other alternative, if practicable, is a delay, in which the company may stockpile partially produced items as well as conduct the last customization processes as orders come in. Of course, there is always the alternative of boosting the system’s capability, although this may be quite costly.

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