Ford Motor Company requires thousands of parts to build and assemble cars at its plants. The Villa Park Ford dealership requires parts to service its customers’ Ford products. Both are concerned with...

Ford Motor Company requires thousands of parts to build and assemble cars at its plants. The Villa Park Ford dealership requires parts to service its customers’ Ford products. Both are concerned with finding optimal inventory policies.

 Ford Motor Company employs a large staff of personnel who use mathematical models to develop optimal inventory policies, whereas Villa Park Ford relies on the input of one service manager, who uses, at best, crude “mathematical models.” Discuss why it is important for Ford Motor Company to employ sophisticated mathematical models to determine its inventory policies (with the associated expense of many high-paying analytical jobs), whereas it would probably

not be worthwhile for Villa Park Ford to employ a fulltime inventory analyst.