Apple Inc. and Dell Inc.
BUS430 Operations Management OM4
Dr. James Collins
June 13, 2014
Every company irrespective of the type of product or service that it sells holds a form of inventory in its daily business operations. Inventory is generally held in the form of finished goods, work in progress i.e. unfinished products as is normally the case in manufacturing and raw materials. Inventory is considered a current asset in a company since it can be itemized in the books of accounts and has a definite economic value. Companies are interested in holding optimum inventory levels at all times since excess inventory results in incremental costs and blocks working capital which affects the overall performance of the company at the end of each financial year (Ou, Liu, Hung & Yen, 2010). Holding less than optimum inventory on the other hand, can easily reduce a company’s market share as clients move to competition due to disruption in supply of products into the market. Inventory management thus involves continuous monitoring of inventory levels, smart planning and quick decision making in the part of management of a company. Companies must therefore be careful not to overstock the wrong product, over-order the wrong inventory or under stock since each has far reaching implications to the company’s performance (Bernardel, Panizzolo & Martinazzo, 2012).
The two reputable multinational corporations that are focused in this assignment are Apple Inc. (Apple) and Dell Inc. (Dell). These two companies manage inventory as part of their daily business operations. Apple was started in 1976 by Ronald Wayne, Steve Wozniak and Steve Jobs. The company is a major multinational corporation and its headquarters are located in Cupertino, California. The company’s main business activity is designing, developing and marketing personal computers, computer software and consumer electronics (Grinnell & Muise, 2010). The company changed its name to Apple Inc. in 2007; a development which marked its shift towards consumer electronics. Before then the company focused on being a market leader in designing, developing and selling personal computers and computer software (Wakabayashi, 2014; Woodward, 2009). The company’s flagship products and which constitute an important percentage of its inventory include the Mac line of computers, the iPod media player, the iPhone Smartphone, the iPod tablet computer, and computer software such as the iTunes media browser, the iWork and, iLife productivity and creativity suites, the OS X and iOS operating systems (Wakabayashi, 2014; Woodward, 2009; Worthen, 2011). Dell is a major multinational corporation that was started in 1984 by Michael Dell in his dorm room at the University of Texas. The company’s headquarters are located in Rock Round, Texas. The Company is currently the third largest personal computers vendor in the world after HP and Lenovo. The company’s product line includes desktop computers, notebook computers, network servers, workstations and storage products (Worthen, 2011). Dell offers a total of 1.6 million different possible product configurations for all its different product offerings which form an important percentage of its inventory. The company deals with several suppliers who include Sony of Japan for its monitors, Nvidia for graphic chips and Microsoft for Windows and Intel for microprocessors (Wakabayashi, 2014; Woodward, 2009; Worthen, 2011). Description of Essential Inventory Characteristics
These companies assemble their different products from their assembling plants located in various parts of the world. The companies obtain different physical parts and software from their various suppliers which they use to assemble the various products that they offer to their clients. Their inventory is therefore made up of parts and software that they purchase from suppliers, the work in progress which is...
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