A-Cat Electronics Case Study

Introduction

In milestone one, I will be providing a description of the scenario depicted in the case study, which identifies quantifiable factors that may affect operational performance, develops a problem statement, and proposes a strategy for resolving a specific problem within a company.

Description of the Scenario

A-Cat is a manufacturing company based in India. This company provides different electronical devices that are used within the household. The main product that is produced by the company is a voltage regulator. These regulators are mostly used in household products like televisions and refrigerators. A-Cat has been the only company providing the Asian region with these regulators for the lowest price available. Despite the popularity and affordability of their products, the company has been faced with various inventory related problems. In the last couple of years, the number of regulators sales have dropped dramatically. While the company has certainly taken a hit from this, it is not the end of their troubles. The company has not been forecasting inventory levels of other products, thus making their comeback from this issue much more difficult.

 Another problem the company is facing is that supplier is becoming upset about A-Cat ordering way too many parts. The main issue with over ordering products is it hinders the supplier’s ability to be sure they have them when there is a demand for them. It was likely that the transformer supplier would raise prices if uniformity and continuity in placing of orders for transformers were not guaranteed Sharma, J. (2013, September 06). This problem has been affecting the company’s efforts to save money and provide customers with the best product. Correctly, which has led them to have too much inventory some months and not enough on other occasions.

Analysis Plan

Quantifiable Factors

Quantitative factors are outcomes from certain actions that are measurable in numbers or numeric terms. In other words, managers can quantify the effects of a decision using data. This could include measuring costs, revenues, or even non-financial data for outcomes to a decision (Quantitative Factors, 2016). In the aforementioned case study, the quantifiable factors would be the amount they spent on purchases, sales of their products, and the number of regulator needed. These factors are the main concern of the CEO of A-Cat. Although the company has been in the green and revenue has been growing slowly throughout the years, this all can quickly change if inventory forecasting is not conducted properly.

Problem Statement

The main problem is that A-Cat is often over ordering parts without looking at the need for the product within that month. They are doing this because the delivery period of these products could be a week or longer which affects the company readiness to product their main product, the regulators. This type of business tactic leads them to have an excessive amount of on-hand inventory. The negative results of this include unbalanced ordering from suppliers, which is causing issues with the supplier. A-Cat does not want the supplier to increase the prices because of their inconsistency of their ordering, despite the various threats from suppliers to do so. This is a huge problem because the company has reduced their number of suppliers from four to one.