Inventory Control Systems
Response to the following:
1.) Select a successful publicly traded company that you are interested in and use the Internet to research its use of inventory management systems and technology. Examine the inventory management system of the selected publically traded company. Determine the key ways that inventory management systems and technology have given the selected company a competitive advantage in the marketplace.
2.) Evaluate the efficiency of two common inventory control systems. Determine the ways in which they provide a firm with a competitive advantage in the marketplace. Justify your response.
Please use quality research in your internet search. Cite your references.
Question 3: Please put the following comment in your own words. No references needed.
Increasing working capital, reducing inventories and improving equity are three distinct actions a company can take that when coupled together improve overall shareholder wealth. Companies can increase working capital by taking on new debt, which we've discussed previously or by improving operating efficiencies around the use of current capital, which I'll discuss. The CFO can directly ensure that suppliers are paid on time and thereby avoid late fees as well as build a relationship, they can negotiate discounts and finally they can manage the actual payment process to ensure inaccuracies on major invoices are eliminated. Reducing inventory can be achieved through implementing a managing metric that monitors the activity on your inventory according to the companies needs (weekly, monthly). In this way the CFO can readily see which portions of the inventory see the most activity and turnover and will allow the CFO additional critical information to forecast which inventory to carry. Once this is known, the CFO can then focus on ensuring there is an adequate amount of suppliers which will contribute to reducing lead times (and a decrease in inventory). Of course to quickly reduce inventory the CFO needs to hold a sale and offer a discount on shelved product. These actions, when coupled together should improve the return on equity that the company has invested.