Question

(b) Complete the following steps in a ‘what if’ analysis for the introduction of a ‘just in time’* form of production materials supply to a car production unit. • Explanation of the Activity • Area of interest • Sub-systems. (*‘Just in time’ is a method of ordering and delivery of stock parts employed by a company, where the company has delivered on a regular, often daily, basis only enough parts for a short period of production. Thus capital that would otherwise be tied up in large stockpiles of production materials is released and cost of storage is avoided.)

Answer 1

B) What if analysis is a method of deciding what things can go wrong and what are the consequences if things do go wrong way. It is a brainstorming method. It is a way of looking different scenarios and calculate various possible outcomes. There are no guaranteed outcomes, they are only assumed outcomes. It provides a way of assessing the possible outcomes for organizations.

Whereas a risk analysis is done in a systematic way. Risk analysis is a process used in organizations to avoid losses and reduce their impact. It aids in handling the risk in a planned way and not just accepts the outcomes arising from risks. Since, risk is uncertain and are unwanted outcomes, therefore what if analysis can't explain the effects and impacts of outcomes occurred.

Just in time is a strategy used by organizations to increase production efficiency by ordering and delivery of stock parts on a regular basis and within a short span of time.

The area of interest of just in time is to minimize costs by spending less money on raw materials, therefore organizations purchase just the amount that is enough to make the product. It minimizes waste. It focuses on continuous improvement. Therefore, it ensures quality control. It focuses on eliminating obselete inventory.