A Case study on Champion electric Essay Example | Topics and Well Written Essays - 1000 words

A Case study on Champion electric - Essay ExampleIn addition, the management stated that it already had profitable products, as well as buffer stock. The heights catalogue levels accumulated pace for the piddy items that were necessary, yet the company did not have any. When a customer ordered a product that was not available, the company had to re-order it, thus wasting a lot of time for the customer. The balancing of too much inventory that may lead to high apostrophizes and few inventories that may yield to loss of cut-rate sales is the main concern for this management. Nevertheless, a firm holds inventory with an innovation of reducing costs and in order to improve customer service. The management of one electric is concerned with the need of meeting customers demands, thus the need for high level of stocks. In this case, they will not loose out on sale due to lack of a product. In addition, bulk buying reduces cost incurred as manufacturers grant a fare price for the bulk b uying, hence a company is guaranteed of making profits once it has bought goods at a uninfected price.However, some goods tend to be irrelevant, as they are remodeled by manufactures, thus, customers request for the latest model of a product. Moreover, Champion Electric lacks the latest products, as its records presage almost a 100% in stock. Barb is given the task of getting rid of the less purchased products in order to create space for young products. A disadvantage arises here, in that, a cost is incurred in terms of storage, and when these products become outdated, the company loses money. Nevertheless, high levels of inventory may mean higher sale if the products prices rise, and also decrease the risk of fall in supply in the future. According to Hobbs Dennis (p.59), high inventory levels lead to high overhead costs, the stock requires a lot of space, which leads to overhead costs therefore, it is important for Barb to introduce inventory management. The main fear of too h igh inventory is that it may yield to barbarian stock that is not purchased, which counts as a loss in any business, as the stock does not yield any returns. What would you suggest to Barb as steps to take in addressing the concerns of president Campos? The level of inventories is mainly affected by demand, uncertainty, and the supply chain flexibility. Competitive advantage cannot be achieved by wholly high inventory levels however, the ability to manage supply chain is necessary. Effective inventory management ensures that a company maintains an ideal level of product as it acts as a key to attaining a competitive advantage for any business, such that, management and control of inventory may yield to customer felicity and profitability of a firm (Toomey, p.1). First, Barb should collect accurate data on the number of inventories available in the store, which also involves keen observation on the number of stocks leaving and entering the stores. Accurate entries on every stock r eceipts should also be considered however, though inventory management may have the appearance _or_ semblance expensive, it assists in monitoring the flow in and out of goods. Inventory management is important to any firm, in that, it influences supply and demand of a product. In the champion electric case, some customers demand for products which the company has run out of however, this may