Unformatted text preview: inventory is
being produced, this is tying down the capital in form of inventory.
2) Since substantial amount of funds are locked in the form of the inventory the
company¶s growth is hindered in terms of expanding business by means of wine
merchandising. 5 We prefer the EOQ/ ROP system as gains from reducing the order/ production size
(gains in terms of less value of inventory being produced) which though lead to
increase in setup cost far outweigh the gains from Blanchard¶s current system (gains
in terms of reduction of setup cost) while, costs are that of the value of inventory
being produced. 3) What should Hank Hatch recommend to his boss Toby Tyler?
1) The company should install perpetual systems (on-line systems) so that the
transactions such as stacked cartons list is updated immediately which can aid in
transfer of control stock on real time basis. The advantage of on-line systems is
that they are always up-to-date.
2) The company can explore the possibilities of reducing the product range in terms
of sizes ba...
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This document was uploaded on 01/29/2014.
- Summer '14