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Case Presentation PART 2

The company's lumber stockroom is experiencing short-term problems with maintaining raw materials and finished goods, and long-term issues with an unclear organizational structure. Specifically, there is no guarantee of sufficient materials, inaccurate inventory records, and high costs. This is due to uncertain demand, a lack of inventory management system, unclear purchasing duties, and insufficient support from managers. The manager must decide whether to increase production, establish an inventory system, define the organization structure, reduce costs, and improve demand forecasting.

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jackywen1024
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45 views1 page

Case Presentation PART 2

The company's lumber stockroom is experiencing short-term problems with maintaining raw materials and finished goods, and long-term issues with an unclear organizational structure. Specifically, there is no guarantee of sufficient materials, inaccurate inventory records, and high costs. This is due to uncertain demand, a lack of inventory management system, unclear purchasing duties, and insufficient support from managers. The manager must decide whether to increase production, establish an inventory system, define the organization structure, reduce costs, and improve demand forecasting.

Uploaded by

jackywen1024
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Statement of the Problem

Problems
The companys lumber stockroom operation is not going wellshort term.
Raw materials and finished goods are not well maintained.
Its organization structure is vaguelong term
Symptoms:
No guarantee for sufficient materials in storage.
No accurate inventory record.
Relevant costs are high, i.e. carrying cost, indirect cost.
Root causes:
The uncertainty of inventory demand, which is 50%.
Lack a well-organized inventory management system.
The duties of its purchasing department are not clearly defined.
Support from top managers is insufficient.
Decisions facing the manager:
Increase production levels by 20%
Establish a valid inventory management system
Clearly define the organization structure
Cut down the unnecessary cost
Analyze previous trend and data of sale, then make targeted prediction.

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