Chapter 12, Problem 2.1CQ

Summary Introduction

Introduction:

Company HI is doing business of assembling high pressure washer system and sales of the system accessories. It consists of wide range of products. Though the company has significant amount of sales, the company mainly focuses on assembling equipment of coin operated self-service car wash system where the owner can wash their car by themselves.

The company functions with 23 people and its key management team is shown below.

The present inventory system comprises of order for refilling stockby the stockroom foreman and the purchasing manager who checks when the stock is low. The majority of inventory parts come from car washes such as paper towels, detergent and wax concentrate.

The shop floor inventory are stored in assembly area. It is out with one of the basic item which causes significant downtime. The company purchases many of its products from manufacturer or wholesaler. There is a question about the credibility of the firm due to recent loss.

To determine: The recommendations and rationale on revised inventory control system.