Final Project 20% Of Final Mark

Question

Final Project 20 Of Final Mark Randy Smith was very proud of his new position as inventory control manager for the Johnson Trinket Company. His primary responsibility had been fairly clearly defined: Maintain an inventory level in the warehouse that ensures that production will not run out of stock, yet also maintain an inventory level that will minimize inventory holding and control costs. Since Randy had recently had a course in materials management, he knew an approach that should help him. He decided to make a list of inventory items in one small section of the warehouse to see if he could develop a good plan for inventory control. If it worked in the one small section, he could expand it to the rest of the more than 30,000 part numbers in the warehouse. The following is the data Randy compiled: Part Number, Part unit value in $, Quantity currently in inventory, Average annual usage. Part number 1236, a very expensive part with almost half-a-year’s worth of inventory. This part is used for a product that has very cyclical demand. Part number 1241 is very inexpensive, yet the inventory is very small. Part number 1242, like 1236, is expensive with almost half a year worth of inventory. Part number 1246 is not too expensive, with a low inventory. Part number 1253 is moderately expensive with a large inventory compared to usage. Assignment (1). Use Microsoft EXCEL and the information above to evaluate the current situation. (2). Given your evaluation, try to develop an integrated inventory control policy that Randy should consider. (3). Is there other information that you would like to see that might help you to make a more effective policy? (4). If so, what would that information be and how would you use it to help you.

Dr. Jack HW Helper · Accepted Answer

In the role of an inventory control manager, Randy Smith faces the challenge of managing inventory effectively at the Johnson Trinket Company. The objective is to maintain optimal stock levels that ensure production runs smoothly while minimizing holding and control costs. This report will analyze the current inventory situation, propose an inventory control policy, and identify additional information that could enhance the effectiveness of the policy. Evaluation of the Current Situation Using Microsoft EXCEL, we assessed the inventory data provided by Randy. The critical items in question include: Part Number 1236: High-value part with extensive inventory—essential for a product with cyclical demand. Part Number 1241: Low-cost part with insufficient inventory and unreliability in supplier delivery. Part Number 1242: High-value part being accumulated to save on shipping costs at the expense of stock levels. Part Number 1246: Low-cost part, production issues encountered due to quality control. Part Number 1253: Moderate-cost part facing rejected items due to a previous audit. Based on this evaluation, it is evident that Randy must consider not only the financial implications of keeping too much inventory but also the risks posed by stockouts on essential components, particularly those with cyclical demand. Integrated Inventory Control Policy Proposal To address the inventory challenges, I recommend the following integrated inventory control policies: ABC Analysis: Classify inventory into three categories based on importance and value: A items: High-value items with tight controls (e.g., Part Numbers 1236 and 1242). B items: Moderately valuable items with moderate controls (e.g., Part Number 1253). C items: Low-value items with simpler controls (e.g., Part Number 1241). Just-In-Time (JIT) Inventory Management: Implement a JIT strategy for parts that have a reliable supplier to reduce holding costs (e.g., Part Number 1241). Safety Stock Levels:** Establish safety stock

Final Project 20% Of Final Mark ✓ Solved

Final Project 20 Of Final Mark

Paper For Above Instructions

Evaluation of the Current Situation

Integrated Inventory Control Policy Proposal

Additional Information Needed

Conclusion

References