Inventory Management

Topics: Production and manufacturing, Manufacturing resource planning, Holding cost Pages: 17 (5587 words) Published: June 20, 2013
Table of Contents
1.0 INTRODUCTION2
2.0 LITERATURE REVIEW3
2.1 Forecasting Inventory3
2.2 Aggregate Planning3
2.3 Capacity Planning4
2.4 Materials Planning5
2.5 Just-in-Time (JIT)6
3.0 ORGANIZATIONAL BACKGROUND8
3.1 History of the Company8
3.2 Introduction to the Product9
3.2 COMPANY SCALE11
4.0 ORGANIZATION'S PRACTICE AND POLICY12
4.1 Inventory Management System12
4.1.1 Inventory Replenishment14
4.2 Inventory Holding15
4.3 Adopted Model15
4.4 Contingency Plans16
5.0 RECOMMENDATIONS17
6.0 PERSONAL REFLECTION18
7.0 CONCLUSION20
8.0 REFERENCES22
9.0 APPENDIX26

1.0 INTRODUCTION
It is said that one of the most important aspects of operations is managing the inventory. According to Kiesmuller, 2003, he states that Inventory Management is defined as the process of specifying and placement of stock goods while taking into account the aspects of costs and space as well as logistics into the matter.

One of the major issues with Inventory Management is the inability for a firm to accurately plan and manage the inventories they have be is overstocking of goods or inability to manage the operations of logistics and production properly.

As Kiesmuller, 2003 mentions, it is a "ballet and marriage between the most powerful minds in an industry and the most obstructive item in the firm" The proper management and dispersion of inventory is highly essential as it will determine the total outcome as well as the survivability of a company in terms of managing the finance to handle inventory.

In order to have the best management for inventory, it is highly essential for the firm to manage the primary governing factors which will be later explained in the literature review section commenting on the main aspects of Inventory Management. According to Geoff, 2005, he concluded that despite the key aspects of Inventory Management being taken into account, there will always be external factors which are set to throw it off balance.

2.0 LITERATURE REVIEW
2.1 Forecasting Inventory
The concept of forecasting inventory usually occurs in order to develop a all rounder view into the future production of a firm. In other ways, forecasting is defined as predicting the required and existing inventory before it has even occurred.

According to Bragg, 2002, the concept of forecasting inventory must occur on a regular basis in order to ensure that the existing procedures can be fine tuned to accept and adapt to the future situation. In short, it is designed for

However, Wong, 2003, refuted this claim by stating that forecasting
2.2 Aggregate Planning
Aggregate Planning is also known as aggregate scheduling is concerned with determining the quantity and timing of production for the intermediate future, often 3 to 18 months. (Jay,H. and Barry,R). According to Lin,P. and Brian,H. 1995, the goal of aggregate planning is to achieve a production plan which will then effectively utilize the oragnization’s resources to satisfy expected demand. As for the manufacturers, aggregate planning ties the firm’s strategic goal to production plan for example budgeting, personnel and marketing.

Denson’s success relies on effective aggregate planning to match fluctuating demand in the toothbrush industry. The operation manager will determine the best way to meet forecast demand by adjusting production rates, labour levels, overtime work, subcontracting rates and other controllable variables.(Geoff,B. 2005)

The company do not only determines output levels but also the appropriate resource input is used. Aggregate planning inputs including resources, demand forecast, policy statements and costs. Also, Denson employs level aggregate planning as to maintain a constant daily production rate and draws upon stockpiles of finished goods whenever monthly output dip below their matching sales market.(Geoff,B. 2005)

The company have massive warehouses storing their goods. When...

References: Cary M. Wong, Brian H. Kleiner, 2001. Fundamentals of material requirements planning, [e-journal] Vol. 24(3), pp. 9 – 12, Available through: Emerald database [Accessed 14th June 2012].
David Sykes, (1994), Planning for Excellence in Materials Handling, [e-journal] Vol. 7(6), pp. 10 – 12, Available through: Emerald database [Accessed 14th June 2012].
E-Denson.com, 2012. Company Profile. [online] Available at: <http://e- denson.com/en/profile.html> [Accessed 14th June 2012]
Geoff,B., 2005
(Inventory System Software Blog, 2011. Top 10 Benefits of Great Inventory Management. [online] Available at: < http://inventorysystemsoftware.wordpress.com/2011/05/02/top-10-benefits- inventory-management/> Accessed on 9th July 2012)
Jay,H
Kiesmuller, G.P, Minner, S, 2003, “Simple expressions for finding recovery system inventory control parameter values”, Journal of the Operational Research Society, 54 (1), pp. 83-88.
Patrik Jonsson, Stig-Arne Mattsson, 2006, a longitudinal study of material planning applications in manufacturing companies, [e-journal] Vol. 26(9) pp. 971 – 995, Available through: emerald database [Accessed 14th June 2012].
Svensson, G, 2001, “Just-in-time: the reincarnation of past theory and practice”, Management Decision, [e-journal] 39 (10) pp. 866-879, Available through: Emerald Group Publishing Limited [Accessed 14th June 2012].
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