Consolidated Electric Case Study

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Richard Temple

Consolidated Electric Case Study

3/30/2012

Consolidated Electric Case Study

1. Design an inventory control system for Consolidated Electric based on the case.

Consolidated has a few problems with their inventory control. They have a purchasing agent doing periodic checks of their inventory without reviewing their history and the demand. The lack of a computer inventory system is another problem that Consolidated must address. To design a system for consolidated the company needs to make some changes to its structure and organization.

Consolidated needs to have a central warehouse location with small regional supply centers because it would be easier to supply one warehouse than four. Des Moines needs to be the central location because it is in the middle of Iowa and within an hour of all three supply centers. Consolidated should move away from earn and turn concept when dealing with inventory management. Inventory stock needs to be evaluated on a daily basis with a periodic review system to examine the movement of goods from the warehouse. They should also have a min max inventory level adjusted with lead times so replenishment can be swift and stock outs can be avoided. The more expensive the item a surcharge should be added for maintaining a stock of the item.

The ABC inventory management method should be used for inventory control on the slow selling items. When one of the items in the bottom 50 percent of the product lines is up for replenishment it should be evaluated for profitability. After evaluating the product make a decision to continue or discontinue warehousing the item.

2. Write a one-to two-page paper describing how the system you have designed will help the company meet customer-service and cost objectives.

Consolidated must have a computer for inventory control and to track inventory histories. Monitoring history can show trends in the movement of...
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