1597353784327_OEF ASSIGNMENT3_GROUP_ASSIGNMENT - 1 What specific action should the company take in the area of inventory control Support your

1597353784327_OEF ASSIGNMENT3_GROUP_ASSIGNMENT - 1...

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1. What specific action should the company take in the area of inventory control? Support your proposal with an analysis of its strengths and weaknesses. (5 marks) The company should introduce schedule planning and material requirements planning to properly manage the inventory in line with production requirements. There is notable lack of production planning and scheduling observed from the case. Proper inventory management should also be applied where records of stock in hand are captured thus allow provision of a clearer view of products required as well as stock in hand. There are currently no formal inventory records captured. The use of the make and buy sheet lacks sufficient details for efficient decision making. Having an inventory management system helps companies avoid production overruns and inaccurate material requirements and stock control, which may be costly in the long run. Strengths of having an inventory management process include efficient production resulting from accurate production planning of raw materials and quantities required. It also helps in planning production timelines accordingly and in line with sales requirements. The challenges associated with such a system include the complexity of managing inputs to efficiently calculate requirements planning. It can also be a costly to implement and requires skilled resources with the necessary technical information and clear processes. As with any system, if the inputs are not accurate, the resulting plans will be distorted. 2. What is your reaction to the argument of those who oppose tighter controls? (5 marks) The effective inventory management process includes effectively managing inventory on hand for efficient production. The cost of buying an producing in small quantities resulted in delays and loss of sales. This is sufficient ground to warrant changes in the operating procedures. Having tighter controls will help preventing production overruns and also assist in managing stock in hand. The cost of storing the materials required outweighs the production losses encountered. Formal record keeping will allow quality estimates to be drawn for efficient order planning. The potential savings cannot be properly evaluated due to the lack of records available from the system. With the number of products produced in the company, an investment in an inventory management system will be beneficial and will yield returns that outweigh the initial investment made in the system.
3. How would your recommendation in answering question 1 differ if this

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