Inventory Usage Assessment

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Inventory Usage Assessment When assessing the inventory needs and management the annual figures are unlikely to give sufficient detail regarding potential seasonal fluctuations to be useful. Therefore, it is necessary to look at the trend on a seasonal, or even monthly, basis. The inventory usage for 2009 - 2012 is shown in figure 1 below Figure SEQ Figure * ARABIC 1; Inventory Usage 2009 - 2012 It is apparent that there is volatility in the level of inventory needed in different months. The addition of a trend line gives the equation of the slight increase, which is seen with a slight overall upward slope on the trend line, which may be used of forecast forward using the y intercept equation. The equation is y = 123.51x+39323. As x is the month (or other period given in the data set), according to this for month 49 (Jan 2013) there would be inventory of 40,928.63. However, when looking at the volatility that breaking the data down into years, so that each year may be compared, is likely to indicate the high and low seasons. The data may be placed into a line graph to look at the way that each month compares. This is shown in table 2. Figure SEQ Figure * ARABIC 2; Monthly Inventory Use by Year This shows that there are seasons, with higher demand in the summer months and a decline in winter. The 4th quarter is the lowest season, with December being the lowest usage month, whereas the second quarter is the highest with May as the highest month. The
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