TAYLOR INCORPORATED INVENTORY MANAGEMENT CHALLENGE.
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TAYLOR INCORPORATED INVENTORY MANAGEMENT CHALLENGE
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Transcript of TAYLOR INCORPORATED INVENTORY MANAGEMENT CHALLENGE.
TAYLOR INCORPORATED
INVENTORY MANAGEMENT CHALLENGE
ELEMENTS OF INVENTORY MANAGEMENT
Basic Principles:
Demand
Inventory Costs
ELEMENTS OF INVENTORY MANAGEMENT
Inventory Control Systems:
Continuous Inventory Systems
Periodic Inventory Systems
CATEGORY OF INVENTORY: DEFINED
ABC Classification System:
Class A Items
Class B Items
Class C Items
CATEGORY OF INVENTORY: CRITICAL MANAGEMENT
Steps in ABC Analysis:
Classify Inventory Items as A, B, or C
Determine Level of Inventory Control
ACCURATE FORECASTING: IMPORTANCE
Sales Enhancement
Customer Satisfaction
Cost Control
ACCURATE FORECASTING : METHODS
Qualitative Forecast Method
Quantitative Forecast Method
NUMBER OF UNITS TO PURCHASE
Based on the economic order quantity, the total number of units to purchase for the new distance
measurement device is 95 units
• Sales are estimated to be 4,500 units annually.
• The cost of each unit for Taylor Incorporated is $1,200.
• Inventory carrying cost is 5% of the cost value of the device.
• Order placement cost is $60.
NUMBER OF ORDERS PER YEAR
$4,500 units sold annually
95 units purchased
The number of orders per year that must be made is 47
REFERENCE
RUSSELL, R. S., & TAYLOR, B. W. (2009). OPERATIONS MANAGEMENT: CREATING VALUE ALONG THE SUPPLY CHAIN (6TH ED.). HOBOKEN, NJ: JOHN WILEY & SONS.
