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Ref No: 3835
3. The causes of the availability problem:
Many factors seem to lead to the problem of availability form supplies4medics.SOCIAL WORK:First of all they have failed to make accurate forecasts thus not reordering the highly needed items before time. The demand for some items is surely different than it was several years ago.SOCIAL WORK.
SOCIAL WORK: Thus the failure to update the inventory management system is one of the main causes. The company has failed to track each item and adjust the system to the current market demand such items. The staff seems to be not properly trained to make decisions based on the economic order quantity. SOCIAL WORK: For instance the reorder quantity of some of the items is double the EOQ for the same items. For other items the current reorder quantity is even less than half of EOQ.
SOCIAL WORK: Zinc oxide tape needs to be reordered when the current stock falls to 1250 but the company only order when it reaches down to 50. It seems the company will be short of this item throughout the supply lead time. This is why some of the items are held in excess which result in excess holding costs to the company. On the other hand some items are not available to meet the demand. There seems to be no day to day
| 3. The causes of the availability problem: Many factors seem to lead to the problem of availability form supplies4medics. First of all they have failed to make accurate forecasts thus not reordering the highly needed items before time. The demand for some items is surely different than it was several years ago. Thus the failure to update the inventory management system is one of the main causes. SOCIAL WORK: The company has failed to track each item and adjust the system to the current market demand such items.SOCIAL WORK The staff seems to be not properly trained to make decisions based on the economic order quantity. For instance the reorder quantity of some of the items is double the EOQ for the same items. For other items the current reorder quantity is even less than half of EOQ. Zinc oxide tape needs to be reordered when the current stock falls to 1250 but the company only order when it reaches down to 50. It seems the company will be short of this item throughout the supply lead time. This is why some of the items are held in excess which result in excess holding costs to the company. On the other hand some items are not available to meet the demand. There seems to be no day to day check for inventory |
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| 5. Recommendations to the company:SOCIAL WORK : The company is facing a number of problems with respect to managing their inventory. It is incurring needless holding and storage costs. There is not sufficient inventory to match the demand of the customers. Also it is hard to employ a system where operations could be automated. The forecasts look inaccurate. To manage inventory efficiently the company should employ the EOQ model to manage orders. This will answer the questions of When and how much to reorder more inventory. A separate record should be maintained in the system for each SKU which should alert the company whenever the current stock reaches the EOQ. The demand for each product should be updated. This will ensure the effectiveness of the EOQ model. Even when the above recommendations are incorporated there should be regular update on the factors that make up the EOQ formula. For example the holding costs for some products might change. Or some suppliers might not provide in time.SOCIAL WORK The inventory turnover for some items is extremely high. This means the company needs to reorder more quantity to reduce the ordering costs for such items. For example Ear loop masks seem to turn over a number of times during the week. This suggests that there is a high risk of shortage for this item. Other items like Rectal speculum needs to be reordered in low quantities because the turnover is slow and it might take up space and increase the total holding costs. The company needs to hire a good cost accountant to keep track of inventory and update their information with regard to the monthly or annual demand for each product. This will help adjust the SKUs for future. Giving heed to highly demanded items and decreasing the quantity of low demand items will benefit the company. The assumptions taken by the EOQ model should be considered. There is the assumption that demand for products will remain consistent and distributed evenly though out the year. However for some seasonal products this might not be the case in practice. SOCIAL WORK Thus the variables should be adjusted in each period to look out for unexpected changes. Another assumption is that the product is available readily in the marked and that in will arrive on time. However this might not be the case for some suppliers who need to be order prior to the time the company’s inventory reaches the EOQ level.SOCIAL WORK |
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| 3. The causes of the availability problem: Many factors seem to lead to the problem of availability form supplies4medics. First of all they have failed to make accurate forecasts thus not reordering the highly needed items before time. The demand for some items is surely different than it was several years ago. Thus the failure to update the inventory management system is one of the main causes. The company has failed to track each item and adjust the system to the current market demand such items. The staff seems to be not properly trained to make decisions based on the economic order quantity. For instance the reorder quantity of some of the items is double the EOQ for the same items. For other items the current reorder quantity is even less than half of EOQ. Zinc oxide tape needs to be reordered when the current stock falls to 1250 but the company only order when it reaches down to 50. It seems the company will be short of this item throughout the supply lead time. This is why some of the items are held in excess which result in excess holding costs to the company. On the other hand some items are not available to meet the demand. There seems to be no day to day check for inventory |
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| 5. Recommendations to the company: The company is facing a number of problems with respect to managing their inventory. It is incurring needless holding and storage costs. There is not sufficient inventory to match the demand of the customers. Also it is hard to employ a system where operations could be automated. The forecasts look inaccurate. To manage inventory efficiently the company should employ the EOQ model to manage orders. This will answer the questions of When and how much to reorder more inventory. A separate record should be maintained in the system for each SKU which should alert the company whenever the current stock reaches the EOQ. The demand for each product should be updated. This will ensure the effectiveness of the EOQ model. Even when the above recommendations are incorporated there should be regular update on the factors that make up the EOQ formula. For example the holding costs for some products might change. Or some suppliers might not provide in time. The inventory turnover for some items is extremely high. This means the company needs to reorder more quantity to reduce the ordering costs for such items. For example Ear loop masks seem to turn over a number of times during the week. This suggests that there is a high risk of shortage for this item. Other items like Rectal speculum needs to be reordered in low quantities because the turnover is slow and it might take up space and increase the total holding costs. The company needs to hire a good cost accountant to keep track of inventory and update their information with regard to the monthly or annual demand for each product. This will help adjust the SKUs for future. Giving heed to highly demanded items and decreasing the quantity of low demand items will benefit the company. The assumptions taken by the EOQ model should be considered. There is the assumption that demand for products will remain consistent and distributed evenly though out the year. However for some seasonal products this might not be the case in practice. Thus the variables should be adjusted in each period to look out for unexpected changes. Another assumption is that the product is available readily in the marked and that in will arrive on time. However this might not be the case for some suppliers who need to be order prior to the time the company’s inventory reaches the EOQ level…… |
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| 3. The causes of the availability problem: Many factors seem to lead to the problem of availability form supplies4medics. First of all they have failed to make accurate forecasts thus not reordering the highly needed items before time. The demand for some items is surely different than it was several years ago. Thus the failure to update the inventory management system is one of the main causes. The company has failed to track each item and adjust the system to the current market demand such items. The staff seems to be not properly trained to make decisions based on the economic order quantity. For instance the reorder quantity of some of the items is double the EOQ for the same items. For other items the current reorder quantity is even less than half of EOQ. Zinc oxide tape needs to be reordered when the current stock falls to 1250 but the company only order when it reaches down to 50. It seems the company will be short of this item throughout the supply lead time. This is why some of the items are held in excess which result in excess holding costs to the company. On the other hand some items are not available to meet the demand. There seems to be no day to day check for inventory |
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| 5. Recommendations to the company: The company is facing a number of problems with respect to managing their inventory. It is incurring needless holding and storage costs. There is not sufficient inventory to match the demand of the customers. Also it is hard to employ a system where operations could be automated. The forecasts look inaccurate. To manage inventory efficiently the company should employ the EOQ model to manage orders. This will answer the questions of When and how much to reorder more inventory. A separate record should be maintained in the system for each SKU which should alert the company whenever the current stock reaches the EOQ. The demand for each product should be updated. This will ensure the effectiveness of the EOQ model. Even when the above recommendations are incorporated there should be regular update on the factors that make up the EOQ formula. For example the holding costs for some products might change. Or some suppliers might not provide in time. The inventory turnover for some items is extremely high. This means the company needs to reorder more quantity to reduce the ordering costs for such items. For example Ear loop masks seem to turn over a number of times during the week. This suggests that there is a high risk of shortage for this item. Other items like Rectal speculum needs to be reordered in low quantities because the turnover is slow and it might take up space and increase the total holding costs. The company needs to hire a good cost accountant to keep track of inventory and update their information with regard to the monthly or annual demand for each product. This will help adjust the SKUs for future. Giving heed to highly demanded items and decreasing the quantity of low demand items will benefit the company. The assumptions taken by the EOQ model should be considered. There is the assumption that demand for products will remain consistent and distributed evenly though out the year. However for some seasonal products this might not be the case in practice. Thus the variables should be adjusted in each period to look out for unexpected changes. Another assumption is that the product is available readily in the marked and that in will arrive on time. However this might not be the case for some suppliers who need to be order prior to the time the company’s inventory reaches the EOQ level. |
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