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Author Tsui-Lin Kuo
Pages 227–251
Keywords Digital transformation, Inventory management, Make-to-stock, Make-to-order, Channel management |
How to Cite Kuo, T.-L.(2024). Sunright Foods Corporation—Inventory management. Management Review, 43(2), 227–251. https://doi.org/10.6656/MR.202404_43(2).ENG003
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Abstract
The unsolved issue for Sunright Foods Corporation is: Whether AI digital transformation can break the 1/3 product shelf life curse? This study explores the transformation of production and sales strategy through AI deployment by establishing an economic order quantity (EOQ) model based on inventory management theory; deciding order timing based on optimal order quantity, demand quantity, and lead time; setting the inventory safety level to prepare for unexpected demand increases, lead time extensions, or shortages; comparing the cost-effectiveness of Make-to-stock and Make-to-order model; and pointing out the impact of the transformation of channel management.
The findings show that Make-to-stock strategy is preferable when considering EOQ, but Make-to-order strategy is more favourable when considering purchasing, ordering, holding, shortage, quality, and opportunity costs. This study emphasizes not to assume that Make-to-stock strategy is solely guided by the EOQ decision model since EOQ only considers trade-offs between ordering and holding costs, while inventory management also includes purchasing, shortage, quality, and opportunity costs.