QUESTION 4: (10 marks)

(a) An Apparel manufacturing company in Indonesia has hired you as a consultant to investigate the use of a 'mass customization' in its production line.

(i) How will you decide which, if any, of the products are suitable candidates for mass customization?

(2 marks)

(ii) If you recommend mass customization, how might the relationships with

suppliers need to change?

(2 marks)

(iii) Explain a strategy that the apparel company can use to reduce uncertainty in the supply chain.

(1 mark)

(b)

i) Explain the concept of Economic Order Quantity(EOQ). Include in your

answer why the EOQ represents the best optimal order quantity (Hint: Discuss the trade-offs between different inventory costs.)

(1 mark)

ii) Discuss the impact of deviations in order sizes determined by (EOQ) model

on the total inventory costs and its practical implications.

(1 mark)

(c) Some companies like Dell use a strategy named differential pricing, which is one of two types of differential pricing strategies that companies usually use.

(3 marks)