Firms often have to spend many hours on finding suppliers for the materials they require and find high demand items every time their inventory reaches reorder level. Having preferred suppliers for high demand items is one solution, but there is always the risk of stockouts if such suppliers are unable to supply. Stockouts of items like maintenance, repair, and operating (MRO) supplies and service parts as well as raw materials required in production could bring the operations of an organization to a standstill. 

Consider a motor vehicle manufacturing plant in Uitenhage, South Africa, that is located next to a tire manufacturing plant. The motor vehicle manufacturer uses the tires, manufactured in the plant next door to their motor vehicle assembly plant, in their production line. The tires from the manufacturing plant are therefore supplies required in the production line where motor vehicles are assembled.

REQUIRED

Propose a solution to the motor vehicle manufacturer to ensure that sufficient stock of tires is always available for their production line, and explain its advantages and disadvantages.