Inventory Management System For Parts Emporium

1. Three major problems currently faced by Parts Emporium are as following:
2. Inadequate customer services.
3. Ineffective stock management of the company.
4. Inability to meet the demand of the customers due to stock out situation.
5. Conducting a detailed investigation on the company and its environment along with appraisal of its historic financial performance shall be a better way to get a total and clear picture about the company and its operations.
6. In this case the reason to limit the study to two items only is to concentrate on small amount of inventory to recommend steps to improve the management of these two items.
7. Yes, including the delivery charges will increase the revenue of the company.
8. Physical inventory count is the current inventory system.
9. Current level of service is not satisfactory.
10. Introduction of economic ordering quantity (EOQ). This will ensure there is no stock out situation as well as the cost of inventory management will be optimized.
11. By showing the impact of using proposed inventory system on the financial performance of the company.
12. Both items are used in a lot of 500 units is the only similarity where as there are number of differences including huge demand for EG151 and significantly less demand for DB032.
13. Perpetual inventory system shall be introduced to ensure there is an effective inventory management system in place(Mancini, 2016).

Working notes:

The IT department can help the Parts Emporium by developing an effective online inventory management system which shall have the features on line real time processing. The online real time inventory management system will help the company to maintain inventory at optimum level. As a result the loss of sale due to stock out situation will not be experienced by the company in the future. Thus, the financial performance of the company will be improved (Bernard, 2014).       

Internet sources have helped us to understand the different types of inventory management system available to an organization. The qualitative characteristics of inventory management systems were also present in the internet. Thus, it was definitely helpful to know about the different types of inventory management system and effectiveness of these systems (Xu, Yao & Zheng, 2010).      

References:

Bernard, P. (2014). Integrated inventory management (10th ed., pp. 78-123). New York: John Wiley.

Mancini, M. (2016). Time management (5th ed., pp. 11-178). New York: McGraw-Hill.

Xu, H., Yao, D., & Zheng, S. (2010). Optimal Control of Replenishment and Substitution in an Inventory System with Nonstationary Batch Demand. Production And Operations Management, 20(5), 727-736. doi: 10.1111/j.1937-5956.2010.01191.