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A car assembly plant had to shut down operations for a day because tyres had not been delivered - HSC - SSCE Business Studies - Question 7 - 2014 - Paper 1

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A car assembly plant had to shut down operations for a day because tyres had not been delivered. What inventory management strategy at the car assembly plant may ha... show full transcript

Worked Solution & Example Answer:A car assembly plant had to shut down operations for a day because tyres had not been delivered - HSC - SSCE Business Studies - Question 7 - 2014 - Paper 1

Step 1

What inventory management strategy at the car assembly plant may have caused this situation?

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Answer

The situation described suggests that an inventory management strategy that relies on minimal stock levels could have led to the shutdown of operations. The 'Just-in-time' (JIT) strategy aims to have materials arrive exactly when they are needed for production, reducing inventory costs. However, if tyres were not delivered on time, this approach could result in production delays. Therefore, the likely reason for the shutdown is the reliance on the Just-in-time strategy.

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