Indiv essay - For some business, a large amount of money is...

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For some business, a large amount of money is spent on inventory. Improper management in planning and control can cause the business to lose money. So it is important for the business to know to the basic models and approaches to inventory management in order to reduce the cost and improve company’s performances. The approaches are: 1) Just-in-Time Inventory Management Definition: Just-in-time inventory management is one of the strategies in monitoring the inventory process. This strategy involves in reducing inventory cost and wastes in which the materials are bought and the goods are produced only to meet the demand of the customers. Example of company that uses this approach: For example Dell is one company that implemented just-in-time systems. Benefits to the company: The benefits of this system are the reduction of waste within the company by increasing quality and work system and also increase profitability and return in investment by the reducing of the cost. Dell only need certain component parts to manufacture the computer as the inventory (components) will become absolute due to technology advance in certain period of time. In order word it means that Dell only bought the components/stock for its immediate need to manufacture the goods and only begin production after the order was received. Problem arises: But problem may arise if the company doesn’t have strong relationship with suppliers. Solutions: So Dell has collaborated with suppliers like Sony and Intel which Dell may able to start its operation if the materials arrive in fixed time manner and produced it to customers. 2) Total Quality Management Moreover another strategy in inventory management is total quality management. Definition: This strategy not only concerned in quality of the products and services but also quality culture in the workplace in order to achieve the organization’s goal. Example of company uses this approach: In Ford Motor Company, team work plays an
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This note was uploaded on 11/07/2011 for the course ACCOUNTING 2203 taught by Professor Asma during the Spring '11 term at University of Malaya.

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Indiv essay - For some business, a large amount of money is...

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