A business entity generally has numerous aspects that require controlling, storage, procurement and sale of products or services. Where there is the right inventory with the right quantity/quality at the exact place at the right time and proper cost effectively is what is described as inventory management (Morton et al. 2015). There are several techniques of inventory management. Inventories are either small, medium and in some cases large; each of this inventories has own challenges.
In small inventories, significant challenges revolve around capital costs especially the initial or startup capital; there is also a challenge of handling and storage challenges as compared to costs. Lastly, other limitations are occasioned by the ever-increasing taxes, insurance costs that may not be easily handled. On the other hand, large inventories face constraints of serving the customer base, the costs of ordering, utilization of labor and general set up costs. Based on the above analysis, it is evident that Crayola Company fits well under the large inventories section.
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Essentially, Crayola has both dependent and independent demands; dependent demand is based on the demand for another item. In this case; the demand by the retailers mostly triggers the need for raw materials from the producers and supplier. Such raw materials include dyes, paraffin wax, ink and papers; this is what forms dependent demand items. Independent demand on other hand occur through the Crayola's request for materials just for the sake having them available and avoid natural calamities such as change of weather and the time it will take for transportation. The other finished products are influenced by market thus making them independent demand objects.
In conclusion, Marker Maker product demand faced an unexpected surge; the surge was a challenge to managers. In addressing this, however, Crayola management team should consider several strategies; firstly, adopt a reactive capacity technique (Zhu et al. 2016). This technique is the ability to upgrade production when it is needed, secondly, having a sufficient stock that is safely stored to be released to the market when any surge is occasioned.
References
Morton, J., Cambiaghi, R., & Radcliffe, N. (2015). Warehouse/DC management: Inventory management requires an end-to-end approach. Peerless Media LLC, a division of EH Publishing, Inc . retrieved on 24 October 2018, from https://www.logisticsmgmt.com/article/warehouse_dc_management_inventory_management_requires_an_end_to_end_approac
Zhu, J., Vaghefi, S. A., Jafari, M. A., Lu, Y., & Ghofrani, A. (2016). Managing demand uncertainty with cost-for-deviation retail pricing. Energy and Buildings, 118 , 46-56.
