Nature of customer demand within a company Essay
The general nature of the funeral business is to some degree incredibly uncertain. There is no guaranteed way of forecasting future work as there is no guarantee that death rates in the area will remain the same year on year due to various factors e.g. general health in the area, local disasters, poverty rates etc. For the purpose of this report the focus will not be on the funeral business as a whole but on one area of sales – monumental masonry.
The nature of customer demand – volume, variety and uncertainty
Month on month the monumental masonry side of the business will complete, on average, 40 monumental orders – 75% of this work will be new work that has come from funerals that the business has recently …show more content…
Stock control within the business mostly depends upon the type of monumental orders placed. In the case of work such as additional inscriptions and ongoing maintenance where materials such as gold leaf and adhesives are used the business uses the theory of economic order quantity whereby quantity of materials ordered monthly is based upon the steady demand of orders. As the items are not perishable it can be stored in a relatively small space if not used on a monthly basis. Obviously if there are materials unused from one month to the next then it will not be reordered the next month. In the case of new monumental orders it depends entirely on what monument has been ordered and if it is on stock. The most common headstones/vases/plaques are kept on stock to a maximum of 10, at the end of each month the monumental manager will complete a stock take of monuments and replace the number used. For other monuments displayed in the brochure that are not common then the individual orders will be placed for each item and the operation uses the Just In Time approach to complete the orders. This reduces the cost of storage and cost of stock held. In terms of waiting times for monuments to be delivered to the business this again depends on the type of monument that has been ordered and is reflected in the waiting time for the customer. For example a standard 8”x8”