The protagonist Jamie Brown had been working in the textile industry for 32 years. He was passionate about the industry and enthusiastic about improving Coats's operations, particularly in the Shenzhen, China, factory. At an operational level, Jamie was challenged by the conflict of business priorities. One of the key directives set by the board of directors was to maximize cash flow. Inventory was the significant contributor to cash constraints in this industry, and Coats began to reduce batch sizes for production, and to reduce inventory stockpiles. To meet customer requirements for short lead times, thread was produced in small lots, and after the order was filled, the remaining thread was placed in inventory. With his strong operational background in the textile industry, Jamie was aware that by following this procedure, Coats was sacrificing economies of scale that could hurt profitability which could also impact cash flows through the year. This sacrifice also raised the question of whether Coats should pursue a make-to-stock or make-to-order strategy, since a make-to-order strategy implied that lot sizes would be set in accordance with customer orders.

Following case study UST 1215-050 Coats (A): Responsive Production and Order Fulfillment, Coats (B) examines make-to-stock (MTS) and make-to-order (MTO) strategies in more detail. First, it considers how strategic (especially cash flow) objectives affect MTS and MTO decisions and how decisions on lot sizing affect both fixed and variable production costs. In particular, it highlights the significance of the risk and costs of overstocking when facing a higher premium on cash flow tied up in the inventory of an unsold product. Secondly, on a tactical level, it suggests frameworks for determining aggregate production quantities prior to a sales season with the objective of minimizing the risks of overproduction and also conserving cash flow. Thirdly, it suggests a basic framework to determine minimum lot sizes based on some high level cost and demand data.

Henry Tam, the logistic director at 7-Eleven's Combined Distribution Centre (CDC), is considering how to tackle a high employee turnover rate. This challenge is partially the result of a shortage of labor in Hong Kong. Over the years, Henry has taken several steps to address the issue. These include collaborating with non-governmental organizations (NGOs) to train and employ disabled workers; adjusting the use of cold storage for perishable goods; how to handle bakery products; how bulk goods are packed and distributed; and adopting new technologies to improve employee productivity. Moreover, Henry offers the staff three hours of overtime per day, allowing them to earn more. Henry doesn't know what else he can do to decrease the high turnover and retain his employees.