Read the following case study and then answer the questions that follow. Terex Corporation is a global manufacturer of aerial work platforms and materials processing machinery. They design, build and support products such as large lifting equipment used in construction. The company makes most pieces to order and customizes them to meet customers unique preferences. Terex maintained a manual system for yard management at their transfer centre in Washington that is always full of lifting equipment, which generated excessive costs for what should have been a relatively simple process of locating customers units to prepare them for delivery. A wallboard and sticker system was a low-tech solution for identifying equipment items in the yard at Terex. While inexpensive in itself, the solution cost around six minutes every time an employee had to locate a unit in the yard. It also required a considerable number of hours to be spent each month taking physical inventories. After a successful pilot, the company approved a new solution, replacing stickers, yard maps, and wallboard with electronic tracking and digital inventory management. This saved the company around 70 weeks per year in labour costs, by cutting the process-time down from six minutes, to a mere 30 seconds per unit.

In your answers, you will be awarded more marks for integrating the theory and facts from the case study than if you discuss them separately.

Q.2.1 Classify Terex Corporations operational process for their production facilities. Justify your choice. (10)

Q.2.2 Identify and explain two types of operational failures Terex could experience. (10)

Q.2.3 Assess the financial costs of holding too much inventory, with application to the case study. (10)

Q.2.4 Explain why determining the right quality is important for the purchasing and supply function in a business such as Terex Corporation. (10)

Q.2.5 Recommend a type of market coverage suitable for Terex Corporations products. (10)

Q.2.6 Recommend the use of a MRP inventory control system for Terex Corporations production facilities.