Inventory Case Study

1561 Words4 Pages
bulb-icon

Recommended: Case study on factors affecting inventory management

Company Name: Ama Greenfield Breweries plc. Inventory is one of the resources that are managed by business organizations and it was first recorded in 1601. The need for inventory control cannot be overemphasized as it is a means for improving the performance of manufacturing industries. Inventory can be defined as a record of a business current assets including property owned, merchandise on hand and the value of work in progress and work complete but not sold and it is classified as a current asset because it can be turned into liquid cash within a short period of time. Inventory has created a great impact on the profitability of the manufacturing firm which resulted to the deep research of this topic. Effectiveness of inventory management …show more content…

In manufacturing, inventories of raw materials allow companies to operate independently of their sources of supplies. Day to day operations are not dependent on deliveries from supplies since stock of the necessary materials are maintained and used s needed. Without inventory control, millions of naira could be lost year because of non accountability of stocks and inaccurate checks and balances. The process of control and management of inventory is a very important factor in the success or failure of any business. For example, little stock will result in stock out which will disrupt the production distribution cycle that is crucial to the survival of all manufacturing companies while too much stock will tie down the resources of a company. Poor or inadequate inventory management can present a serious challenge to the productive capacity of a manufacturing organization. In addition to raw materials and finished goods, many companies also maintain items of assets, property, inventories of work in progress, office supplies, business firms and general operation …show more content…

Stocking excessive amounts of finished wood products such as lumber, plywood, veneer, OSB, MDF, I-joists, or furniture reduces profit because storage costs for these inventory goods are significantly more than the cost of raw materials or WIP inefficiencies due to greater costs already absorbed. The purchase price of raw materials is not the only cost to consider when planning inventory. In addition to the purchase price, there is also the cost of setting up an order and the cost of holding or maintaining

Show More
Related

  • Dawson Lumber Company Limited

    1515 Words  | 4 Pages

    The Canadian lumber industry can be seen as very unattractive at best. Expected oversupply of Canadian lumber, increased competition in the industry, and greater buyer power, have put downward pressure on prices, adversely affecting the profitability of producers.

    Read More

  • Space Age Furniture Company

    2441 Words  | 5 Pages

    In today’s operational management arena, there are certain expectations from a managerial aspect that must be met in order to be successful. A comprehensive look at the Space Age Furniture Company will show exactly what the Materials Requirement Planning (MRP) calculations are for this company at present time and then take the information given in order to properly suggest ways to improve the sub-assemblies. In addition, there will be an analysis on the trade-offs between the overtime and inventory costs. A calculation will be made on the new MRP that will improve the base MRP. This paper will also compare and contrast the types of production processing to include the job shop, batch, repetitive, or continuous, and determine which the primary mode of operation should be and exactly why. A detailed description on how management can keep track of the job status and location during production will also be addressed. Finally, there will be a recommendation on they type of changes that need to occur that will be beneficial to the company and at the same time add value to the customer. This paper will conclude with summary of the major points.

    Read More

  • Gap Analysis: Kuiper Leda

    1968 Words  | 4 Pages

    Kuiper Leda lacks an effective Inventory Management to handle properly the increase in demand of stock and production. An inventory management plan would be capable of forecasting errors in production, client-required service levels, total lead time in manufacturing a unit or batch of the product, and demand priorities. Inventory control is a challenge currently because of the size of Midland Motor's order. In order to meet the demand the company needs to increase the inventory which increases the inventory costs. KL have an opportunity of using the Just - In - Time method of inventory control which eliminates waste by making the resources and labor available only in the time and amount required. It will help increase productivity, product quality and work performance while saving inventory costs for the company. (Curtin, 2008). Kuiper Leda also needs to keep in mind that they will still have to fill orders from other clients that have previously placed orders or even new customers.

    Read More

  • Gap Analysis: Kuiper Leda

    895 Words  | 2 Pages

    Inventory management has traditionally been considered as a necessary resource that every company needed. Its primary purpose was to evaluate and control inventory from the raw material level, through the production process and control stage, to the final out-door delivery. These older models of inventory management had several issues, such as inefficient control system, long cycle time, and bureaucratic process. Beginning in the late 1980s, many corporate businesses became deeply interested in developing new inventory management system that will reduce operation cost and expand market chare. Today, the business world is still improving its inventory system. The most effective systems are now not just count products and manage production schedule, but obtain lower prices by making large purchases, and increase inventory turnover. Today, forward-looking corporations build their serious efforts at inventory management systems through implementing new technologies, involved digitization, Internet, high-speed data network, and other e-sources that became available after business outsourcing and globalization.

    Read More

  • Eliyahu M. Goldratt's The Goal

    2942 Words  | 6 Pages

    Inventory - The money that the system has invested in purchasing things which it intends to sell.

    Read More

  • Just in Time Distribution

    2188 Words  | 5 Pages

    Before the introduction of JIT, there were a lot of manufacturing defects in the system such as inventory problems, product defects, rising cost, large lot production, and delivery delays. Some other problems also included equipment breakdowns, and uneven production levels. The inventory problems included unused inventory that was unproductive and the extra effort of storing and managing it. To store inventory, it costs money called Carrying Cost, which can be expensive. However, with the use of the JIT system, inventory costs can be reduced by as much as 50 percent, if not more.

    Read More

  • Financial Reporting Wells Fargo

    804 Words  | 2 Pages

     Inventory and manufacturing reports: This report is for efficient production. Optimizing inventory and manufacturing cost help a business gain max output from minimum input. For this A-Z report of inventory and manufacturing report is needed. It will help manager to make decision for budget. This report is also important to all employees who are related with activity for

    Read More

  • Just In Time Inventory System (JIT)

    1292 Words  | 3 Pages

    The just-in-time (JIT) inventory system was developed in Japan after World War II, in an effort to control costs during fiscally challenging economic times (Waguespack and Cantor, 1996). The challenge that faced many Japanese companies in the post-War era was to find a way to meet the needs of customers and businesses while utilizing as few resources and as little capital as possible. The Japanese developed these set of techniques in order to control production, limit unnecessary products and reinvest the valuable capital left from the savings back into the business structure (Waguespack and Cantor, 1996). Much of the success of many Japanese corporations over the past four or five decades has been was linked to the principles of JIT (Chhikara and Weiss, 1995).

    Read More

  • Walmart Inventory Management Case Study

    1260 Words  | 3 Pages

    Inventory management is a method through which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle of the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seen more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company; effective and efficient inventory management is of critical importance.

    Read More

  • Inventory Search Is Necessary

    486 Words  | 1 Pages

    I enjoyed reading your post and hearing about your opinions on the topics you covered. In the section titled “Inventory searches, probable cause not required,” I found the most interesting point to be that if any criminal evidence is found within the inventory searches that it can be used within court, as you said. This can be beneficial for police doing an investigation where an individual has been arrested for drug charges or so on. Upon searching their vehicle that was possessed, the police may find drug paraphernalia, for example. The evidence that is found within these types of searches could help to contribute to evidence against the defendant. I believe that it is important that the police follow procedure when storing an individual’s belongings and keep them safe. The police should not take anything from the individual including money, jewelry, etc. For the most part this law is very beneficial, but as with any law with power, it can be abused.

    Read More

  • Case Study Of Laundry Business

    735 Words  | 2 Pages

    Do you know what a Laundry business is ...? If you do not know and understand about what a laundry business, it's good to read the article here. Who knows in the future you have the desire to open a business that many loved by consumers of this upper middle class.

    Read More

  • Wholesalers Case Study

    762 Words  | 2 Pages

    Wholesalers acts as a lesion between manufacturers of commodities and other industries that are interesting in selling the same products. Along this distribution chain wholesalers usually purchase goods in large quantities and in turn sells them to retailers who ultimately supplies goods and services to consumers. Due to the available space at wholesale locations they are able to store products for distribution to retailers which reduces retailers storage costs. Wholesalers are able to store goods in large quantities which allow retailers to purchase in small quantities. Due to this option retailers are able to only purchase what is needed at that given point (Kotler & Keller, 2012). Additionally, because wholesalers are able to purchase goods

    Read More

  • Inventory Management Essay

    927 Words  | 2 Pages

    Inventory management is defined because a science mostly established art of guaranteeing that just enough inventory share is command with a company to fulfill demand (Coleman, 2000; Jay & Barry, 2006). it's mostly regarding specifying the size and keeping of stacked product. Inventory management is usually needed at completely distinct spots within a service or within multiple spots of a supply network to guard the standard and planned course of production up against the random disruption of running low upon materials or product. The scope of inventory administration also concerns the good lines between replenishment period interval, carrying costs of inventory, asset management, investment forecasting, inventory valuation, selection visibility,

    Read More

  • Importance Of Procurement Cycle

    1120 Words  | 3 Pages

    As it has been stated before in the paper, good inventory and storage control interacts with different aspects of procurement cycle, to achieve best storage procedures. It is Important to understand customer needs in foodservice industry, to create menu items, which people are willing and able to buy, this will unable chefs to create standardized recipes, to make purchase specification and stock request. It is also important to control the sales, to ensure all of the items on the menu are selling and making profit for the business (Baldwin, Wilberforce, & Kapur, 2011). This will ensure there are no overstocked items and no spoilage in the storerooms. Controlling sales will also help with calculating pax stock amount needs. Once the stock request from the kitchen is done, stores manager job is to contact suppliers and purchase needed ingredients. Receiving is one of the closest related aspects to storage in the procurement cycle. Once the order arrives to the warehouse, receiver needs to carefully check the order and place it in proper storage quickly after receiving, to ensure the safety and freshness of the produce. A good store manager needs to ensure the entire inventory is properly positioned, labeled and has safe storage conditions, as well as rotating First In First Out to avoid spoilage(Biles

    Read More

  • Essay On Inventory Management

    1436 Words  | 3 Pages

    Inventory can be explained as any assets that are held for future use or sale. Inventories are held for a variety of reasons, such as customer demand for end items, smoothing production, a hedge against stock outs and price increases, and economical purchasing. It is very costly and wasteful to keep large inventory on hand. The new technology and application quantitative tools and techniques for inventory management have permitted decrease in inventory. Top management needs to understand the role that inventories have on a company’s financial performance, operational efficiency, and customer satisfaction and strike the proper balance in meeting strategic objectives. They are responsible in keeping sufficient inventories to meet demand of the customers by sustaining the lower cost as possible. Inventories are required for a business to operate efficiently and effectively. Inventory management is a very significant part of basic operations activities. Most businesses and general organizations obtain most of their revenue through the sale of inventory.

    Read More

More about Inventory Case Study

Open Document