Consolidated Electric Case Study Essay

Decent Essays
Richard Temple

Consolidated Electric Case Study


Consolidated Electric Case Study

1. Design an inventory control system for Consolidated Electric based on the case.

Consolidated has a few problems with their inventory control. They have a purchasing agent doing periodic checks of their inventory without reviewing their history and the demand. The lack of a computer inventory system is another problem that Consolidated must address. To design a system for consolidated the company needs to make some changes to its structure and organization.

Consolidated needs to have a central warehouse location with small regional supply centers because it would be easier to supply one warehouse
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Computers can also track the actual inventory levels with the use of barcode scanners. Scanning entering and exiting inventory can current levels and avoids mistakes that can happen by using the card system.

Locating a central distribution center will increase the control over inventory for Consolidated. Having small point of operations will reduce the amount of inventory that will be maintained at the sites. Each location will have different needs and only stocking the immediate customer needs at each location will reduce overall costs. The purchasing discount will be easier to maintain if all shipments come to one location which will also save the company money. Having a couple small vans deliver to regional locations within an hour is less costly than ordering extra just to meet the minimum purchase discount. The cost of shipping to small locations will be minimal and will save the company and customers money in the long term. If the contractors know of items that they will need for a job they can inform Consolidated and the special items can be delivered to the job site or picked up at the regional office. Communication is key and willing to provide the best service in a timely manner will reduce cost and increase profit.

Having a min max inventory system with lead times built into the system will increase the replenishment of inventory and avoid being out of stock. This is great for the
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