Focusing on the role of quantitative techniques in the decision-making process, it is important to note that the second half of the twentieth century has been marked with serious advances of research approaches when it comes to real problem-solving. With the rapid progress of information technology and significant institutional and structural changes that shaped a new landscape of economic and corporate environment towards trade and globalization of markets. In this process, it is significant to note that the contribution that quantitative approach can make to the general management decision making is important. One good example is the application of Just in Time delivery as expressed below.
Defining the problem
Kenya Vehicle Manufacturers has been operating under intensive inventory and the company is holding up to 42,000 tons of non-used inventory. This is making the company spend over $1 million in taking care of an inventory that is not continually being used. Additionally, the company has employed over 100 employees that are working daily to take care of the general inventory. If the company continues to keep their inventory at its highest level, then it will be making a serious loss after a period of time.
Developing a Model
In order to come up with the best system that will make the company safe in managing their general resources and even to ensure flow in their inventory, Kenya vehicle manufacturers should minimize the general 42,000 tons of non-used inventory and even reduce the total population of employees who are managing the inventory in general. Kenya Vehicle manufacturer's product should make use of Just in Time(JIT) as a strategy of managing their inventory so as to reduce the total cost incurred in handling the whole system and to ensure general efficiency in dealing with the customers. If the company adopt JIT effectively, what will take place is that the general cost will be minimized and since the company is having much greater inefficiencies and bottleneck in their daily operation, the level of inventory can be extreme and only Just in time(JIT) is one perfect tool in reducing costs and maintaining quality at the same time.
Acquiring Input Data
In coming up with the best Just in Time model, the company made use of the historical data in performing the general test. When it comes to managing and running the model the Just in time strategy will be incorporated it into the company's Enterprise Resource Planning(ERP). Through enterprise resource planning, information will be achieved from every section of the company since the whole process is one system that is integrated into the general. Through the Integrated system, customers will forward their request to the company and a quick process of delivering products to the client will be done without taking a long time and even the company will work on reducing their cost of inventory.
Since the system is an integrated system, it is important to note that gaining information will be so easy since information will be readily available on the customer car orders, the available cars in the store, the country and geographical location where there is great demand. Generally, the Enterprise Resource planning will provide sufficient information of the external and the internal information about customer preferences, general cost parameters, and the existing priorities.
Just in Time model takes a very little time to load and even to manage in general since demand and supply are constantly changing the whole process will easy to operate. The integrated system will make sure that client's order is effectively processed so as to meet the existing demand.
Test the solution
In testing the solution, the model was verified and validated using the existing data. With the solution realized through the Enterprise Resource Planning is compared to be very accurate and good as compared to that made without the Just in Time and the whole Enterprise Resource Planning in general.
Analyzing the Results
Since the company adopted the Just in Time strategy, in the year 2003, more than $ 1 million have been annually saved. The company has worked on their inventory and now most of their customers are happy with the general performance of the system.it is important to note that Kenya vehicle manufacturers have avoided more than $ 4 million that has been spending on inventory to manage other good projects in the process. Some of the solutions that have also been realized include reduced congestion which has been a major concern in the past.
Implementing the Results
Considering the whole process of implementation, the IT department and the senior management who championed the adoption of Just in Time process played a significant role in overcoming some of the challenges during the implementation process. The general job description of the store management department was changed to cost department and the worked on ensuring that cost information was entered into the Enterprise resource planning system. Due to the success of the Just in Time strategy the company has emerged to be one of the best-performing companies.
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