Parts Emporium Case

Parts Emporium, Inc. is a wholesale distributor of automobile parts formed by two disenchanted auto mechanics, Dan Block and Ed Spriggs. Originally located in Block’s garage, the firm showed slow but steady growth for 7 years before it relocated to an old, abandoned meat-packing warehouse on Chicago’s South Side. With increased space for inventory storage, the company was able to begin offering an expanded line of auto parts. Fifteen years later, Parts Emporium was the largest independent distributor of auto parts in the north central region.

Lastly, the company suggest to expand their current inventory through increasing production and capacity. With the increase in production rate the company can gain more consumers as a whole through supply and demand. Doing this would give the company an opportunity for more exposure and perhaps better brand recognition.

EOQ as described everywhere is “the order quantity that minimizes total inventory holding costs and ordering costs. It is one of the oldest classical production scheduling models”. This model uses the following assumptions:

As one of the divisions of Hawthorne Corporation, Limited (Hawthorne), General Merchandise (GM) earns about 63.86% of Hawthorne’s annual revenue. All of the 450 GM stores are operated as dealer owned and operated franchises. Strategically, Hawthorne’s GM division is formed to attract more hobbyist and commercial businesses, and to reinforce the entrain barrier of Canadian market for the US competitors. During the mid-1990s, Hawthorne realized that its GM division is not addressing the needs of the two key customers segments in the automotive parts industry – ‘do-it-yourself’ hobbyists and commercial consumers. Plus, the fact that Hawthorne’s commercial consumers dislike its expansion of stores, Hawthorne has decided to open a

Based on our projections for the years 2002-2004, the biggest driver that effects debt is the company’s operating expenses. Based on the history of the upward trend of operating expenses, our recommendation is that The Body Shop needs to concentrate on lowering the operating expenses, and keeping those expenses around 45% or lower in order to avoid borrowing money. Our 45% recommendation includes a safety net which will prevent having The Body Shop borrowing cash if sale do not continue to climb at a significant rate.

Northcutt Bikes is a bike manufacturer and a service provider of bike parts to the many retail businesses that sell Northcutt bikes. Northcutt Bikes has a warehouse that is 95% utilized however they have an order fulfillment rate of less than 80%. This has caused a loss of revenue due to orders being cancelled when needed parts are not in stock. To resolve the problem, we looked at 3 alternatives including establishing pooling groups within the same geographic region, establishing a continuous review inventory management system or staying the course. Our recommendation is to establish a continuous review inventory system that will reduce unnecessary inventory, increase needed inventory and improve service levels.

While operating a manufacturing company one can expect to encounter different types of methods of inventory costing. The four methods I will be discussing are, first in first out, last in first out, average cost methods, and specific identification method. I will also be discussing the pro and cons of utilizing each method.

The factors for the loss of revenue are: 1) Having an outdated application/ database server, 2) Having outdated sales and inventory management software, and 3) Not implementing e-commerce as a business model. We depend on the server to maintaining accurate data, in terms of inventory and sales data. Ziggy’s Suit shop cannot maintain accurate sales, and customer transactions. The problems seem to reflect the outdated sales management software being used at the time. The Ziggy’s Suit Department is having additional problems with maintaining accurate designer inventory data this includes; quantity of products hand, amount products sold, amount of inventory on order, price at point of sale, and the expansion of new designer inventory.

Lately, Mr. Milligan has become concerned with his inventory management methods. he now wants to better manage his inventory. As a starting point, he wants to examine his costs, sales, markup percentages, gross profits, and inventory levels. He asks you to review his inventory and make suggestions for improvement. He provides you with the data and asks you to prepare an Inventory Analysis worksheet.

The third problem is the excess of inventory in each division. Advantages of this preparation can be caused either by the decision of the production or marketing, the bad quality of goods and others. In addition, evaluation performance using the ROI as a measure is also not right. Moreover, investments or assets are only measured at the beginning of the year until the excess preparation is not questioned or observed

The Scientific Glass, Inc (SG) is a midsized company in the specialized glassware industry producing for and supplying to research facilities and specialized laboratories in its market regions; North America, Europe, Asia Pacific and rest of the world. The company is facing an increase in inventory level balances with too much capital tied up in inventory preventing it from using its capital towards international expansion. Evaluating other options on the basis of effects of SG's previous attempts at

Nowadays, in an era that has advanced technology and a place in the world. Everything can be linked only at your fingertips in the times of rapidly developing with the sophisticated technology of today. Therefore, an inventory system is also not lagging behind in introducing a method of keeping an inventory data systematically and safely. The system plays a very important role in improving the competitiveness of a business. Usually, organizations today face too many challenges to achieve the cost, speed and reliability. Efficient inventory system really help in order to make sure the store’s performance and data record is always in good condition and secured from abusers. The system basically to ease the admin to manage the

3. SciTronics apparently needed $29 mil of inventory at year-end 2008 to support its operations during 2008. Its activity during 2008 as measured by the cost of goods sold was $74 mil. It therefor had an inventory turnover of 2.55 times. This represented an improvement from 2.05 times in 2005. (Inv. Turnover2008 = 74 mil/29 mil and Inv. Turnover2005 = 43 mil/21 mil)

An inventory management system, inventory control and inventory accuracy are paramount to a mass production manufacturing facility, especially when multiple part types and multiple product types are being produced. Raw component inventory can account for millions of dollars of an organizations’ cash, which is not contributing to profitability until converted to a product and sold. Therefore, it is essential for an organization to have an inventory management system and an inventory control process to account for the value associated with each part and ultimately to return value to the operation.

Hopkins Warehousing and Distribution Company is a public firm that offers manufacturers in many states in the United States with enough space to keep their products so as to reduce other costs, storage and distribution costs. Hopkins Company’s main challenge is its inability to obtain large loans to facilitate its expansion; this is because it does not have enough assets to secure large loans, (Galin, 1994). There are other competitors in the market they do not affect the profitability of the firm as there are many manufacturers who want the services. The company operates in a technocratic environment where most of its customers are learned and well acquainted with the market.