APPLIED BUSINESS RESEARCH & STATISTICS

APPLIED BUSINESS RESEARCH & STATISTICS

APPLIED BUSINESS RESEARCH & STATISTICS

Globalization has created many opportunities for the business to enter in international markets. Many firms have shifted their production sites to Asian countries due to lower cost structure. Although this offered numerous advantages to firms, however, business complexities have increased to manage the inventory and supply path. Sea cargo is the cheapest way for companies to shift their inventory from production sites to the required destination (Stotsky, 2009).

Research Context

Sea cargo is characterized as appropriate inventory management channel in the world. However, certain risks are associated with this channel system which includes natural disaster such as hurricanes, typhoons and tsunamis, and pirates' attack, mid-sea faults in ships which affect the delivery time and channel system of ships (Stotsky, 2009). Firms having stringent delivery time system need to take into consideration possibilities of above stated incidents which may create significant problems. National Oceanographic and Atmospheric Administration (NOAA) Department has reported that Sea Cargo Ships in Atlantic Ocean are most affected by Hurricanes during the period from beginning of July to end of November (Franklin, 2009). Based on the expected occurrences of hurricanes, many vessels ready to leave the dock are rescheduled to avoid losses if weather forecast a natural disaster.

Ford Motors has divided its production unit of automobiles in three production sites, two in Germany and one USA where final assembly of vehicle is done. Engines are shifted from Germany to Spartanburg County Site from Vessel Cargo to USA and then inland transportation (Stotsky, 2009). During season of July to November, hurricanes may result in delay of supply to final assembly site.

Statistical Research Analysis

Ford Motors uses a Time Series Model to manage its supply schedule. It needs to incorporate statistical progressions to set its export timeline for the region where it is dependent on Sea Cargo. Statistics shoes that major hurricanes appear during the period of Mid-August to Mid-November (Franklin, 2009). Based on forecasted weather situation, two situations may arise. Either, Vessel time may be rescheduled to a later date or it will leave the dock on already scheduled fixed time. In order to increase rationality of decision for scheduling inventory export time, Bayes' Theorem will provide significant accuracy in predicting the chances of delay in situation so that company can adjust its delivery channel time.

Bayes' Theorem is appropriate to use in the situation described above ...