Question

1. List and discuss two of the alternative manufacturing strategies.

2. Firms also face several trade-offs when deciding upon a location.  E.g. Locating facilities close to consumers improves response times and reduces transportation costs.  What other costs increase as a result?

Answer 1

Solution:

1.Two alternative manufacturing strategies are,

• Lean Manufacturing:
  This strategy aims at reduing the unwanted labour,material and resources to make the manufacturing as efficient as possible. This strategy is also called as Just in time manufacturing. The inventory is minimised and resources are kept at bare minimum. This strategy has been shown to showcase immense benefits to the organization and has resulted in highly efficient manufacturing processes.
• Customization:
  This strategy aims at being flexible and being customizabe to adoat the changing demand of the changing consumer choices. this strategy is very much customer oriented and products manufactured are not standard but are customised by the buyer. the famous example of this strategy is DELL

2. The cost of acquisition of the land becomes higher choosing to manufacture near the consumer base. also, the legal costs which are associated may increase becasue not very often the manufacturing facility near the consumer base will come in at a cheap cost and the prices will be significantly higher given the advantages posed by manufacturing at that particular location.