OPERATIONS & FINANCIAL DECISION MANAGEMENT Essay

OPERATIONS & FINANCIAL DECISION MANAGEMENT - Essay Example 1. As per the abbreviated balance sheet dated 31.1.2006, the stock levels on 31/1/2007 was  £ 1382,592 as compared to  £ 1132,505 on 31/1/2006. Thus, there has been an increase of 22.08% over the previous year. Moreover, it is seen that the inventory components of stock in the company consists of many small items supplied by different manufacturers . Among these, items like envelope, envelope scoop, padded cover, inflator fans, basket, burners and cylinders form the main constituents of the finished product – the inflatable balloons. It is seen for these crucial stock items, there may be only one or two approved suppliers. Therefore, it needs to be ensured that delivery and quality aspects need to be strictly looked into, since the safety aspects of these air balloons cannot be compromised since it involves human safety and security. Moreover, if it is needed to change suppliers of crucial items, it become necessary to get recertified from the approval body for safety and security which may not be an easy task. Therefore, it is felt that given the fact that there are many sub assembly parts and components involved in the making of an air balloon, it is necessary to maintain a higher level of stock inventories. Lead time: The manufacture of hot air balloons involves a specialist task entailing maximum safety and standard control adherence, and nothing could be left a chance in the manufacture of hot air balloons. In the case of ordering being placed for resupply, the delivery may take time, depending upon the type of raw materials and the time required for reorders. For the supply of fabrics, the lead time may be around 8 weeks. Again, in the case of other items, the lead time would be a period ranging from 3 days to 3 months, depending upon market conditions and availability of materials reordered. Sometimes it may happen that the items may not be available in ready stocks with the vendors/suppliers, and therefore, it may