Assignment:
Question 1. Declines in Inventory Costs and Levels
Carrying high levels of inventory can be costly and risky. While products sit on shelves, opportunities and financing might be missed. Pilferage is a potential risk. Over time, the product could become obsolete.
Today, organizations are developing techniques to reduce the levels of inventory they must maintain, and their associated costs. For example, one evolving trend is to maintain showroom inventory. Approaches such as in-transit replenishment stock and point-of-sale reordering also reduce stagnant inventory costs.
- How have new approaches influenced inventory information delivery in your organization?
- Investigate and identify any significant declines in inventory costs and levels for your organization over the span of the past 20 years.
- How have costs of carrying high levels of inventory (such as financing, opportunity, obsolescence, and pilferage) in your organization changed?
- Suggest at least one reason for any apparent decreases in costs or levels of inventory.
- What benefits can you attribute to these declines?
Question 2. Costs of Transportation
Historically, in the United States, the use of trucking has vastly outweighed the use of other modes of transportation. With fuel prices on the rise today, and given current economic conditions, it is likely that there will be both short- and long-term changes ahead.
- What potential changes do you see in the preferred modes of transportation for your industry sector? Specify any evolving trends you can see.
- Identify the mode of transportation most used by your organization. Can you discern any potential areas for improvement? For example, might rail be more cost-effective than trucking (assuming that customer demand can be satisfied)?
- Identify any challenges that less-versatile, less-capable companies may face, if they cannot be flexible in embracing new modes of transportation.
- Describe some of the best practices, in the area of transportation mode utilization, that leading companies in your industry have embraced.