Improper Inventory Management and Sales Forecast at Merdeka

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
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1
SUPPLY CHAIN MANAGEMENT
Answer 1:
The primary issues at Merdeka are improper management of inventory and failure to
forecast sales which ultimately results in lower level of customer satisfaction. These issues have
resulted in low profits.
The main reason behind these two issues are failure of the company to manage the stock
of inventory efficiently. The company emphasized on saving inventory acquiring costs instead of
acquiring high quality inventory. This resulted in maintain ace of a supply chain containing
several suppliers within Canada for smaller components and within North America for Biggert
and more expensive components. The company as a result was not able to manage the order
placement and delivery of inventories from them. This often resulted in low productivity, late
delivery and customer resentment (Christopher, 2016).
Answer 2:
The main causes behind the issues of improper inventory management and faulty sales
forecast was inefficient management of the supply chain. Merdeka acquired cheap components
from the local market and the expensive component from North American suppliers. for
example, item 1013 which is expensive was purchased from North American suppliers while
item 5066 which was cheapo was purchased from local suppliers. Now, the BBQ, the finished
products required both the type of products. Thus, if expensive component’s delivery used to be
delayed, the entire production process was delayed. The smaller components had to be held for
longer time period which effected the liquidity of the current assets of the company. This delayed
production of finished goods resulted in improper sales forecast which paved way for customer
complaint (Jacobs, Chase and Lummus, 2014).