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HeatWave Appliances: Optimizing Inventory Management

Upasana Mitra

Product #:W40157
Supplier:Ivey
Discipline:Entrepreneurship, Operations Management
Setting:India, 2024
Details:Case (PDF) • 6 pages • 2025-09-19

Subjects:

Business managementEntrepreneurshipOperations and supply chain management

Industries:

Fabrication and manufacturing

Geography:

IndiaAsia
Your Price:$10.54

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In April 2024, Kavita Singh, the operations manager at HeatWave Appliances, headquartered in Pune, Maharashtra, India, faced an immediate challenge in forecasting monthly demand for the firm’s premier product, microwaves, which exhibited seasonal fluctuations. Specifically, she needed to estimate the economic order quantity (EOQ) and safety-stock levels needed for HeatWave to maintain a service level of 99 per cent. The company's manufacturing division also faced the challenge of procuring microwave components, for which suppliers offered bulk discounts. Singh hoped to identify a strategy that would reduce total procurement costs while ensuring that HeatWave’s production team could respond effectively to fluctuating microwave demand.

Learning Objectives

This case can be used in production, operations management, and decision-sciences courses completed as part of a master of business administration program. It focuses on the integrated use of basic forecasting techniques and inventory models. Additionally, it can be effectively utilized in elective courses on topics such as inventory management, materials management, or forecasting.

It highlights the importance of accurate forecasts in the appliance-manufacturing industry, where seasonal demand fluctuates. The case also offers a practical illustration of how a medium-sized organization can use a techno-economic analysis for various operational activities amid resource constraints. The case demonstrates the challenges firms face in balancing alternatives concerning ordering costs, holding costs, and quantity discounts. After working through the case and assignment questions, students will be able to do the following:

  • Apply quantitative forecasting techniques, emphasizing seasonal forecasting with seasonal factors and linear trend lines.
  • Analyze basic inventory concepts, including holding costs, ordering costs, and the determination of EOQs.
  • Evaluate the applicability of the standard EOQ formula in scenarios where quantity or bulk discounts are available for higher quantities.
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Case Study: HeatWave Appliances: Optimizing Inventory Management (English version) | Ivey Publishing