Polar Sports, Inc. Case Study Help
The inventory turnover in days is increasing from 38 to 41. The increase is minor but if it further increases then it would negatively affect the company’s performance. Due to this, the company can face increase in the cost of storage,but in current scenario; it is negligible because the changes are just minor and won’t affect the company’s performance that much.(unknown, 2018)
The overall effect of changing the methods can be constant only if the cashflow from operating show a positive impact in the level product, which was negative in seasonal manufacturing method. The cashflow from investing and from financing activities show consistency. The pattern is different in both of the methods. Even the cash at end is also constant in level production and seasonal manufacturing method.
Quantitative Analysis
In the level production method, the quality of the products will be improved. The reason is that the contractual based employees might not perform as efficiently as the company and the customers want. The existing employees might also compromise on the quality of the product because at that time the main target of the employees is to meet the customer’s demands. The performance of the employees in seasonal manufacturing is poor due to consistently working, and might negatively affect their health. Even the machines would not perform well during the seasonal manufacturing period due to continuous production with short break. These machines can haveerrors, which would result in the production delay. The depreciation of the machine would be doubled as well. But in level production; chances of these fault is low and they can meet all the demand of the customer.
In production level, the company would be able the check the design and the style of the company’s product. They can innovate them to attract the customers. They can also focus on the stakeholders claim. They have all time to check the customers demand, what they want from the company, what creditors expect from the company, what other suppliers offer to its customers.
In production level, the company will reduce its cost of goods sold and other cost, but the cost of storage or warehouse to keep the produced products till the seasonal month, will increase. The company needs to hire employees to take care of the manufactured products. The company might face the theft of products, which will expose the company’s products to the competitors. The theft will expose the company to fashion risk.
In level production method; the change in fashion trends is also a threat to the company. The fashion trend would change the nature of the customer. The customers are interested in buying skiwear according to the current fashion trend. The level production method might fail in this regard.
Recommendation
At end, it is recommended to the company to adopt the level production strategy. It will help the company in achieving its goal of reducing its operational cost and improving its earning. The quality of the products will also improve,which will result in customers’ satisfaction. The satisfied customer will help in the marketing of the company, by sharing their experience with their friends and families, which would increase the company’s sales. The urgent hiring and then training of the employees won’t be required in the level production strategy....................................
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