Inventory Selection

In order to meet customer demand and satisfaction, Jenny Craig needs to make sure that there is a stock of materials used to facilitate production. This involves making sure that the inventory is always correct and up to standards. Since Jenny Craig is a goods and services based company they have to make sure that they are servicing the clients accordingly, this can mainly be done by keeping the inventory of their products on hand and on point.
In order to protect against uncertainties Jenny Craig maintains a safety stock inventory process. There is a maintained lead-time of two days, which allows each center to have enough inventory of their products on hand to service the clients. Every center is equipped with a computer system that records the amount of orders and products being sold. Once the inventory control system reaches a certain reorder point the company then sends out an order for delivery. A delivery is made every two days to each center depending on the demand and quantity being sold, this entails their lead time.
Jenny Craig mainly supplies each customer with entrees that are all made and owned by the company, which decreases the item costs. An ordering cost is crucial in a company such as Jenny Craig because of the high demand for its products. The company pays for transportation cost, purchasing cost, and receiving cost on all its deliveries each week. Due to the computer systems that record all orders there is little need for a carrying cost. Jenny Craig only holds enough inventory needed until the next delivery, which reduces the carrying cost of its’ products.
Jenny Craig runs on a periodic review system or otherwise known as the P system. This entails that the stock position is reviewed at fixed intervals. “When the review is made the stock position is ordered up, to a target inventory level.” The target level is set to cover demand of Jenny Craig’s products until the next periodic review plus the delivery lead-time. Jenny Craig finds it very important to keep a healthy relationship between service level and inventory level. Customer service levels must be balanced with investment in inventory, since higher customer service levels require higher inventory investment. Jenny Craig would not be able to service their clients without having the goods in inventory to supply them with. A precise inventory set up is crucial for Jenny Craig to operate and have a high customer satisfaction rating.