McLeod Motors Ltd
McLeod Motors recently rationalized a number of motor end shields to reduce manufacturing costs, improve service, and reduce inventories. However, inventories have apparently risen. Students must identify why McLeod has inventory, how large the inventory might have been before the rationalization, how large they might be now, why they are so large, and what could be done to reduce inventory levels. The case can be used in conjunction with a discussion on inventory function.
- To introduce students to inventory and operations control and the functions of inventory.
- To expose students to the nature of inventory build-up in a disconnected batch flow system and to emphasize the relationship between product characteristics and process technology. The integrated nature of operations, lot sizing, inventory control, etc., is readily demonstrated.
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