SCH4801 ASSIGNMENT 2 2025
DISCLAIMER: THIS IS NOT AN OFFICIAL GUIDE FROM UNISA. THE REPORT IS
NOT PREPARED NOR APPROVED BY UNISA, RATHER REPRESENTS A
POSSIBLE SOLUTION TO THE TASK CONSISTENT WITH THEORY OF SCH4801.
THIS REPORT IS INTENDED TO ASSIST STUDENTS IN GETTING STARTED WITH
THEIR ASSIGNMENT, AND IN NO CASE THIS DOCUMENT SHOULD BE USED
FOR CHEATING. WE BELIEVE THIS WILL BE A GOOD STARTING POINT AS IT
WAS PREPARED BY OUR TEAM OF PROFESSIONAL PRIVATE TUTORS WHO
ARE EXPERTS IN THE FIELD, AND IT WAS PREPARED USING VARIOUS
SOURCES. ANY SIMILARITY WITH ANY EXISTING THEORY OR DISCUSSION BY
OTHER AUTHORS IS EXCUSED. THE AUTHORS HOWEVER DO NOT CLAIM
MONOPOLY TO KNOWLEDGE HENCE MODIFICATION OF THE ANSWERS
CONTAINED IN THIS FRAMEWORK MAY NOT BE PROHIBITED AS IT
CONTRIBUTES TO EXPANSION OF KNOWLEDGE. FOR ANY FURTHER
GUIDELINE ABOUT THE INFORMATION CONTAINED HERE AND THE MODULE
IN GENERAL, CONTACT PASSMATE TUTORIALS.
WE ASSIST WITH OTHER MODULES INCLUDING:
ECSs, FACs, MACs, MNGs, INTs, TRLs, HMEMS, PRMs, PROs, MNBs, DSC, QMI,
MNMs, MNO, MNPs, FIN, PUBs, MNMs, RESEARCH among others.
WE OFFER CLASSES, ASSIGNMENT GUIDELINES, EXAMINATION
PREPARATION, RESEARCH AND RESEARCH PROPOSALS, DISSERTATION
EDITING etc.
OTHER THAN UNISA, WE ALSO ASSIST STUDENTS AT VARIOUS INSTITUTIONS
INCLUDING MANCOSA, REGENT, REGEYNESES, BOSTON, STADIO, OLG, UJ,
UP etc
For any enquiries the following numbers can be used for calling, sms, whatsapp and
telegram
CONTACT PASSMATE TUTORIALS @061 262 1185/068 053 8213/0717 513 144 or email
,SCH4801 ASSIGNMENT 2 2025
SECTION A
1.1 Inventory-related decisions
Procurement managers at Toyota are considering a future sourcing strategy of 40% from
local suppliers and 60% from global suppliers, which will significantly impact their
inventory decisions. To balance efficiency and responsiveness, evaluating three key
inventory categories relevant to Toyota and their potential trade-offs is crucial. Toyota's
current operations already involve sourcing raw materials and components, assembling
vehicles, and distributing finished products, implying the existence of these inventory
categories within their value chain.
Raw Materials and Components:
Raw materials and components are the inputs required for vehicle production, such as
brake pedals, catalytic converters, fuel tanks, shift lever knobs, and rear seat assembly
locks according to Ambe (2014). For Toyota, this category is vital as disruptions here
directly halt production.
o Efficiency Considerations: Sourcing 60% of components globally may
offer cost efficiencies through economies of scale and access to a wider
pool of competitive suppliers. However, managing inventory for a larger
proportion of globally sourced materials introduces challenges. To
maintain efficiency, Toyota would aim for lower inventory levels of these
raw materials to reduce holding costs and capital tied up. This is aligned
with Toyota's focus on eliminating waste and maintaining high efficiency
through 'The Toyota Production System' (TPS).
o Responsiveness Considerations: The 60% global sourcing strategy
introduces longer lead times and potentially higher uncertainties due to
greater distances and logistical complexities. To maintain responsiveness
to production demands, Toyota might need to increase buffer or safety
stock for these global components to mitigate risks of supply disruptions,
as experienced in 2019 due to a strike at a local supplier. While local
sourcing (40%) can provide quicker replenishment and greater flexibility to
, SCH4801 ASSIGNMENT 2 2025
unforeseen changes, the 2019 component shortage from a single local
supplier demonstrates that over-reliance, even locally, can severely impact
operations.
o Trade-offs: The primary trade-off is between lower purchasing costs
from global economies of scale (efficiency) and higher inventory
holding costs (including safety stock and inventory in transit) to ensure
continuous production despite longer and less predictable global lead
times (responsiveness). Toyota must carefully manage supplier
relationships for these diverse sources, assessing them based on cost,
quality, delivery, and environmental issues.
Work-in-Progress (WIP) Inventory:
WIP according to Bowersox, Closs, Cooper and Bowersox (2020) refers to partially
completed vehicles or sub-assemblies currently undergoing production processes
within Toyota's Prospection plant. Toyota's manufacturing philosophy, TPS, aims for high
efficiency by minimizing waste, including overproduction and unnecessary processes,
which directly impacts WIP levels.
o Efficiency Considerations: Toyota's TPS is built on Just-in-Time (JIT)
production, which seeks to deliver components at the exact time and
quantity needed, thereby minimizing WIP levels. Lower WIP significantly
reduces holding costs, storage space, and the risk of obsolescence or
damage to incomplete products, as seen in the extensive damage to
vehicles on-site during the 2022 KwaZulu-Natal floods. This aligns with
Toyota's objective of achieving higher quality and lower costs through lean
practices.
o Responsiveness Considerations: While minimal WIP is efficient, a
completely stockless system (theoretical JIT) can make Toyota highly
vulnerable to disruptions. The future mix of global (60%) and local (40%)
suppliers, with associated longer lead times for global components,
means that managing WIP to maintain responsiveness is complex.
Strategic positioning of WIP at "push-pull boundaries" can allow for greater
DISCLAIMER: THIS IS NOT AN OFFICIAL GUIDE FROM UNISA. THE REPORT IS
NOT PREPARED NOR APPROVED BY UNISA, RATHER REPRESENTS A
POSSIBLE SOLUTION TO THE TASK CONSISTENT WITH THEORY OF SCH4801.
THIS REPORT IS INTENDED TO ASSIST STUDENTS IN GETTING STARTED WITH
THEIR ASSIGNMENT, AND IN NO CASE THIS DOCUMENT SHOULD BE USED
FOR CHEATING. WE BELIEVE THIS WILL BE A GOOD STARTING POINT AS IT
WAS PREPARED BY OUR TEAM OF PROFESSIONAL PRIVATE TUTORS WHO
ARE EXPERTS IN THE FIELD, AND IT WAS PREPARED USING VARIOUS
SOURCES. ANY SIMILARITY WITH ANY EXISTING THEORY OR DISCUSSION BY
OTHER AUTHORS IS EXCUSED. THE AUTHORS HOWEVER DO NOT CLAIM
MONOPOLY TO KNOWLEDGE HENCE MODIFICATION OF THE ANSWERS
CONTAINED IN THIS FRAMEWORK MAY NOT BE PROHIBITED AS IT
CONTRIBUTES TO EXPANSION OF KNOWLEDGE. FOR ANY FURTHER
GUIDELINE ABOUT THE INFORMATION CONTAINED HERE AND THE MODULE
IN GENERAL, CONTACT PASSMATE TUTORIALS.
WE ASSIST WITH OTHER MODULES INCLUDING:
ECSs, FACs, MACs, MNGs, INTs, TRLs, HMEMS, PRMs, PROs, MNBs, DSC, QMI,
MNMs, MNO, MNPs, FIN, PUBs, MNMs, RESEARCH among others.
WE OFFER CLASSES, ASSIGNMENT GUIDELINES, EXAMINATION
PREPARATION, RESEARCH AND RESEARCH PROPOSALS, DISSERTATION
EDITING etc.
OTHER THAN UNISA, WE ALSO ASSIST STUDENTS AT VARIOUS INSTITUTIONS
INCLUDING MANCOSA, REGENT, REGEYNESES, BOSTON, STADIO, OLG, UJ,
UP etc
For any enquiries the following numbers can be used for calling, sms, whatsapp and
telegram
CONTACT PASSMATE TUTORIALS @061 262 1185/068 053 8213/0717 513 144 or email
,SCH4801 ASSIGNMENT 2 2025
SECTION A
1.1 Inventory-related decisions
Procurement managers at Toyota are considering a future sourcing strategy of 40% from
local suppliers and 60% from global suppliers, which will significantly impact their
inventory decisions. To balance efficiency and responsiveness, evaluating three key
inventory categories relevant to Toyota and their potential trade-offs is crucial. Toyota's
current operations already involve sourcing raw materials and components, assembling
vehicles, and distributing finished products, implying the existence of these inventory
categories within their value chain.
Raw Materials and Components:
Raw materials and components are the inputs required for vehicle production, such as
brake pedals, catalytic converters, fuel tanks, shift lever knobs, and rear seat assembly
locks according to Ambe (2014). For Toyota, this category is vital as disruptions here
directly halt production.
o Efficiency Considerations: Sourcing 60% of components globally may
offer cost efficiencies through economies of scale and access to a wider
pool of competitive suppliers. However, managing inventory for a larger
proportion of globally sourced materials introduces challenges. To
maintain efficiency, Toyota would aim for lower inventory levels of these
raw materials to reduce holding costs and capital tied up. This is aligned
with Toyota's focus on eliminating waste and maintaining high efficiency
through 'The Toyota Production System' (TPS).
o Responsiveness Considerations: The 60% global sourcing strategy
introduces longer lead times and potentially higher uncertainties due to
greater distances and logistical complexities. To maintain responsiveness
to production demands, Toyota might need to increase buffer or safety
stock for these global components to mitigate risks of supply disruptions,
as experienced in 2019 due to a strike at a local supplier. While local
sourcing (40%) can provide quicker replenishment and greater flexibility to
, SCH4801 ASSIGNMENT 2 2025
unforeseen changes, the 2019 component shortage from a single local
supplier demonstrates that over-reliance, even locally, can severely impact
operations.
o Trade-offs: The primary trade-off is between lower purchasing costs
from global economies of scale (efficiency) and higher inventory
holding costs (including safety stock and inventory in transit) to ensure
continuous production despite longer and less predictable global lead
times (responsiveness). Toyota must carefully manage supplier
relationships for these diverse sources, assessing them based on cost,
quality, delivery, and environmental issues.
Work-in-Progress (WIP) Inventory:
WIP according to Bowersox, Closs, Cooper and Bowersox (2020) refers to partially
completed vehicles or sub-assemblies currently undergoing production processes
within Toyota's Prospection plant. Toyota's manufacturing philosophy, TPS, aims for high
efficiency by minimizing waste, including overproduction and unnecessary processes,
which directly impacts WIP levels.
o Efficiency Considerations: Toyota's TPS is built on Just-in-Time (JIT)
production, which seeks to deliver components at the exact time and
quantity needed, thereby minimizing WIP levels. Lower WIP significantly
reduces holding costs, storage space, and the risk of obsolescence or
damage to incomplete products, as seen in the extensive damage to
vehicles on-site during the 2022 KwaZulu-Natal floods. This aligns with
Toyota's objective of achieving higher quality and lower costs through lean
practices.
o Responsiveness Considerations: While minimal WIP is efficient, a
completely stockless system (theoretical JIT) can make Toyota highly
vulnerable to disruptions. The future mix of global (60%) and local (40%)
suppliers, with associated longer lead times for global components,
means that managing WIP to maintain responsiveness is complex.
Strategic positioning of WIP at "push-pull boundaries" can allow for greater
