Topic: Inventory Control: Production Run Model
Description:
This is the team paper.
Prepare a 4 page report (excluding the cover page, the reference page, and any tables and graphs), Topic ” business inventory control”. No need for describing what is business inventory contol. My part work is ” “You need to include at least one real world example and apply at ” Production Run Model” doe business inventory control. Please follow the flow chart (Figure 6.1) on page 196 of the textbook to present your final findings. You may use hypothetical numbers to illustrate your analysis if you cannot find the actual data. However, you have to use some number to demonstrate your ability to apply your chosen inventory control model to a real world situation. APA format and appropriate use of section heading is required.
Please copy and paste in or attach your Excel Worksheet, which is a must to receive credits for statistical analysis. You do need to analyze your own data and cannot simply cite the statistical result published else where.
Inventory is any stored resource that is used to satisfy a current or a future need. Raw materials, work-in-process, and finished goods are examples of inventory. Inventory levels for finished goods are a direct function of demand. When we determine the demand for completed clothes dryers, for example, it is possible to use this information to determine how much sheet metal, paint, electric motors, switches, and other raw materials and work-in-process are needed to produce the finished product.
All organizations have some type of inventory planning and control system. A bank has methods to control its inventory of cash. A hospital has methods to control blood supplies and other important items. State and federal governments, schools, and virtually every manufacturing and production organization are concerned with inventory planning and control. Studying how organizations control their inventory is equivalent to studying how they achieve their objectives by supplying goods and services to their customers. Inventory is the common thread that ties all the functions and departments of the organization together.
Figure illustrates the basic components of an inventory planning and control system. The planning phase is concerned primarily with what inventory is to be stocked and how it is to be acquired (whether it is to be manufactured or purchased). This information is then used in forecasting demand for the inventory and in controlling inventory levels. The feedback loop in Figure 6.1 provides a way of revising the plan and forecast based on experiences and observation.
Through inventory planning, an organization determines what goods and/or services are to be produced. In cases of physical products, the organization must also determine whether to produce these goods or to purchase them from another manufacturer. When this has been determined, the next step is to forecast the demand. As discussed in Chapter 5, there are many mathematical techniques that can be used in forecasting demand for a particular product. The emphasis in this chapter is on inventory control, that is, how to maintain adequate inventory levels within an organization.
Importance of Inventory Control:
Inventory control serves several important functions and adds a great deal of flexibility to the operation of the firm. Consider the following five uses of inventory:
1. The decoupling function
2. Storing resources
3. Irregular supply and demand
4. Quantity discounts
5. Avoiding stockouts and shortages
FIGURE: Inventory Planning and Control
(Render 196-197)
Render, Barry, Ralph Stair, Michael Hanna. Quantitative Analysis for Management, 11th Edition. Pearson Learning Solutions, 02/2011. VitalBook file.
The citation provided is a guideline. Please check each citation for accuracy before use.