Read the summary below and answer the questions that follow: The Orange Girl – all the juice and nutrition you can ask for Growing up on a citrus farm in Mpumalanga, Yoliswa always wanted to escape to the city. In her little mind, she saw the farm life as the hardest endurance test any individual can be subjected to. She qualified with a mechanical engineering degree and started working in food manufacturing facilities in the city of Jo’burg. The conventional rat race in the city wore Yoliswa down a lot, she started escaping to the farm whenever she got a chance. One day, five years ago, on one of these visits, she found herself wandering on the farm, carried away in childhood memories of how she used to eat oranges directly from trees when they were in season. The farm owner had allowed Yoliswa’s parents to use a section of the farm to grow their own oranges for themselves. Her father decided to follow indigenous ways of growing oranges – his oranges always tasted sweeter, juicier and more filling than the oranges on the bigger portion of the farm. Yoliswa’s father had an orange juice recipe – every season, he would pick oranges and make juice for the family. His orange juice became quite famous with the locals, therefore, he started selling bottled orange juice every season – he called it The Orange Girl, as a tease for Yoliswa, who was very proud of her father. Her old father had handed the business over to her younger brother Bert who mentioned to Yoliswa that he wanted to take this on a large scale but he did not have the resources. On that day, Yoliswa decided to engage her brother in discussion around taking this production large scale. The idea was an instant hit, the siblings decided to register a business, trademark the brand, bought an adjacent farm and started manufacturing orange on a large scale. Five years later, the business has grown by leaps and bounds and the siblings want to start exporting their organic orange juice across the border to Botswana, Namibia and to China. Research conducted has indicated that these three markets present a significant opportunity for The Orange Girl. They have already set up contracts with distribution partners in all these three countries and they are now busy upgrading their production facilities to accommodate the increased volumes, as well as the packaging facility to handle the legal packaging requirements for each country. Q.1. Explain Inventory Carrying Costs and Ordering Costs to the management team of The Orange Girl and discuss why it is important for this business to manage these costs efficiently. Q. 2. The team at The Orange Girl realises that they will now need to hold large inventory in order to run an effective operation – but they are also worried about poor inventory management. Identify any five (5) symptoms of poor inventory management that the team has to look out for within The Orange Girl’s operation. Apply each symptom to the business.
Read the summary below and answer the questions that follow:
The Orange Girl – all the juice and nutrition you can ask for
Growing up on a citrus farm in Mpumalanga, Yoliswa always wanted to escape to the city. In her little mind, she saw the farm life as the hardest endurance test any individual can be subjected to. She qualified with a mechanical engineering degree and started working in food manufacturing facilities in the city of Jo’burg.
The conventional rat race in the city wore Yoliswa down a lot, she started escaping to the farm whenever she got a chance. One day, five years ago, on one of these visits, she found herself wandering on the farm, carried away in childhood memories of how she used to eat oranges directly from trees when they were in season. The farm owner had allowed Yoliswa’s parents to use a section of the farm to grow their own oranges for themselves. Her father decided to follow indigenous ways of growing oranges – his oranges always tasted sweeter, juicier and more filling than the oranges on the bigger portion of the farm.
Yoliswa’s father had an orange juice recipe – every season, he would pick oranges and make juice for the family. His orange juice became quite famous with the locals, therefore, he started selling bottled orange juice every season – he called it The Orange Girl, as a tease for Yoliswa, who was very proud of her father. Her old father had handed the business over to her younger brother Bert who mentioned to Yoliswa that he wanted to take this on a large scale but he did not have the resources.
On that day, Yoliswa decided to engage her brother in discussion around taking this production large scale. The idea was an instant hit, the siblings decided to register a business, trademark the brand, bought an adjacent farm and started manufacturing orange on a large scale.
Five years later, the business has grown by leaps and bounds and the siblings want to start exporting their organic orange juice across the border to Botswana, Namibia and to China. Research conducted has indicated that these three markets present a significant opportunity for The Orange Girl. They have already set up contracts with distribution partners in all these three countries and they are now busy upgrading their production facilities to accommodate the increased volumes, as well as the packaging facility to handle the legal packaging requirements for each country.
Q.1. Explain Inventory Carrying Costs and Ordering Costs to the management team of The Orange Girl and discuss why it is important for this business to manage these costs efficiently.
Q. 2. The team at The Orange Girl realises that they will now need to hold large inventory in order to run an effective operation – but they are also worried about poor inventory management. Identify any five (5) symptoms of poor inventory management that the team has to look out for within The Orange Girl’s operation. Apply each symptom to the business.
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