This article presents unique analysis of the role of inventory and how to manage inventory.  Up until the point when a customer demands the item, inventory is simple resources that are tied up.  Therefore, the management of inventory is very much dependent on the accurate forecasting of demand.

The cereal example that was mentioned in class cannot fully incorporate all the aspects of operations that must be considered.  This is because cereal is generally nonperishable, so the lead time (i.e. the time it takes for the product to get to the customer) has very little effect on customer satisfaction.  For most small restaurant or grocery store businesses, operations is a constant battle between customer satisfaction and cost efficiency.  Firms such as McDonald’s already have a mature supply chain, constant transportation costs, and steady consumer demand.  Therefore, McDonald’s can focus all of its effort on gaining customer satisfaction, which is providing meals in a quick and efficient manner. Small businesses, on the other hand, should focus on keeping bestsellers in stock and have the shortest lead time possible for either special orders or a sudden increase in demand.

Works Cited

Griffiths, Chris. “Don’t let inventory weigh you down.” The Globe and Mail. Web. 18 Nov. 2012. <http://www.theglobeandmail.com/report-on-business/small-business/sb-money/cash-flow/dont-let-inventory-weigh-you-down/article4683167/>.

Transport Management. Web. 18 Nov. 2012. https://gc21.giz.de/ibt/en/opt/site/ilt/ibt/regionalportale/sadc/inhalt/logistics/module_01/16_components.html