Inventory Management for Wheeled Coach
Discipline: Business Studies
Type of Paper: Essay (any type)
Academic Level: High school
Paper Format: APA
Question
Firms like
Wheeled Coach spend over half of their sales revenue on purchases. These
purchases are often in inventory and represent a huge portion of Wheeled
Coach's assets. But, perhaps even more importantly, the ambulances cannot be
built if the proper inventory is not on hand when needed.
Two important inventory management
techniques are ABC analysis and Cycle Counting. Wheeled Coach uses both. But
effective inventory management begins at the design stage. Efficient inventory
control requires knowing what is needed. Bills-of-material (BOM) provide this
knowledge. Therefore Wheeled Coach spends substantial time and effort making
sure the BOMs are correct. Only then does it know what to purchase and have
available for the production process.
ABC analysis helps firms
develop policies and procedures for controlling inventory. A items are the
expensive items such as the chassis (usually purchased from Ford), aluminum
(from Reynolds Metal), and plywood used for flooring and cabinetry (from local
suppliers). These few items constitute the majority of the inventory values at Wheeled
Coach. They are tightly controlled, from purchase to use, with effective
security. Orders are negotiated to maximize quantity discounts while minimizing
on-hand quantities. Some items, such as aluminum, must be ordered as much as
eight months in advance. B items are less expensive and controlled less
tightly. Finally, C items have less control, but all items are stored under
lock and key and only removed from a secure area if they are on a BOM.
Part of the control of
inventory items at Wheeled Coach is cycle counting. Under cycle counting, A
items are counted on a very short cycle, perhaps once a month to verify
transaction accuracy. B items are counted less frequently, perhaps every two
months. And C items are verified once a quarter or even less frequently. Cycle
counting provides a much more effective auditing procedure than periodic
(annual) counts of inventory.
Only by driving down purchase
costs and maintaining tight control of inventory can Wheeled Coach control its
total costs. With 45 competitors and orders that are usually won only after a
bidding process, Wheeled Coach has no alternative to effective inventory
management.
1. Explain how Wheeled Coach
implements ABC analysis.
2. If you were to take over
as inventory control manager at Wheeled Coach, what additional policies and
techniques would you initiate to ensure accurate inventory records?
3. How would you go about
implementing these suggestions?
links:
http://proquest.umi.com/pqdweb?did=1882439091&sid=1&Fmt=4&clientId=29440&RQT=309&VName=PQD
http://proquest.umi.com/pqdweb?did=63686125&sid=1&Fmt=4&clientId=29440&RQT=309&VName=PQD
http://proquest.umi.com/pqdweb?did=1962613081&sid=4&Fmt=2&clientId=29440&RQT=309&VName=PQD
http://proquest.umi.com/pqdweb?did=503494791&sid=4&Fmt=4&clientId=29440&RQT=309&VName=PQD
http://www.computerworld.com/printthis/2001/0,4814,66625,00.html.
529 words, two references
https://myhomeworkwriters.com/blog/powerpoint-presentation-ideas/