Question: Procter & Gamble ( P&G ) is a multinational consumer goods corporation and one of the world's largest and most recognized companies in its industry.
Procter & Gamble P&G is a multinational consumer goods corporation and one of the world's largest and most recognized companies in its industry. Founded in by William Procter and James Gamble, the company has grown to become a global leader in the production and marketing of a wide range of household and personal care products. P&G is known for its extensive and diverse portfolio of consumer goods, including beauty and grooming products, health and wellness items, household care, and baby care products. Some of its wellknown brands include Pampers, Tide, Gillette, Pantene, Olay, and Crest. Procter & Gamble is a global consumer goods giant with a rich history, a diverse product range, and a commitment to innovation and sustainability. Its household brands are fixtures in many homes worldwide, reflecting its influence and impact on the consumer goods industry.
Jon R Moeller, the CEO of Procter and Gamble P&G has requested your services in responding to some of the strategic issues facing the operations management function of the organisation. He has provided you with a number of scenarios that the organisation has been exposed to and thus requests that you draft a report providing the best response in dealing with each scenario.
tableScenarioDescription,tableResponseweightingtableOne of the regional offices of P&G located in Malawi, assembles, and sells premiumdiapers pampers brand The supplies for the product are procured from variousmanufacturers worldwide. Most of the components are procured from wholesalers inSouthern Africa, some critical items, such as wool, come directly from their manufacturerbased in Asia. For instance, the wool is shipped directly from Asia using agents whosubmits an order release once every weeks. P&Gs annual requirements total units per working day and P&Gs per unit cost is R The suppliers always promisedelivery within week following receipt of an order release, there has never been anyexperiences of material shortages lead time amounts to working days.tableThe CFO has been informed that the costs related to inventory include the purchase cost,which amount to R per order, also included are the actual labor costs involved inordering customs inspection, arranging for airport pickup, and delivery to the plant,maintaining inventory records. The costs of holding of storage, damage, insurance, taxes,and so forth categorised as holding costs are determined on a squaremetre basis. Theseequal R per unit per year. With added emphasis being placed on efficiencies in thesupply chain, P&Gs CEO has asked you to evaluate costs associated to inventory controlof wool as it presents opportunities of improved cost savings. Advise on the ideal numberof units of wool that should be ordered to minimise costs, in addition comment on the ROPfor wool given the information provided. Lastly, indicate the downside of depending on theEOQ model for an organisation such as P&GMake use of relevant calculations and examples when answering questions.
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