Production Planning and

Inventory Control
Assignment No.2

Submitted to: Dr. Muhammad Ibrahim

Submitted by: Arslan Akram

Registration No: MSCI-19111115

Department: Business Administration (8-SC)

Introduction:
Adidas AG is a German multinational corporation that designs and
manufactures athletic and lifestyle footwear, apparel, and accessories. It is
one of the largest sportswear manufacturers in the world, known for its
quality products and innovative designs. This report will describe the lot
sizing strategy and billing process of Adidas AG.

Lot Sizing Strategy:

The lot sizing strategy of Adidas AG is influenced by several factors such
as demand, production capacity, inventory carrying costs, and lead time.
The company uses a method called Material Requirements Planning
(MRP) to determine the lot size. MRP is a computer-based inventory
management system that calculates the optimal quantity of inventory to be
produced or ordered at a given time.
Adidas AG uses the MRP system to determine the lot size for its products.
The system considers the demand forecast, production capacity, inventory
levels, and lead time to find the optimal order quantity. The lot size is then
communicated to the production team through the company's
manufacturing planning system.

Billing Process:
Adidas AG uses various billing methods to bill its customers for products
and services. The company accepts payments through credit cards,
PayPal, and other online payment methods. It also provides financing
options to its customers through the Adidas Credit Card and the Adidas
Installment Program.
The billing frequency for Adidas AG varies depending on the product or
service. For example, the company bills its customers for the Adidas
Creator Club subscription on a monthly basis. The payment terms for
Adidas AG are also different for different products and services. The
company provides payment terms such as net 30 and net 60 for some of its
products.
Late or non-payment by the customers can have severe consequences for
Adidas AG. The company may charge late fees or interest charges for
overdue payments. It may also take legal action against customers who fail
to pay their bills.

Conclusion:
Adidas AG uses the MRP system to determine the lot size for its products,
which helps the company to optimize its production and inventory costs.
The company uses various billing methods and payment terms to bill its
customers for products and services. The billing process of Adidas AG is
efficient and customer-friendly.