Client Case Study: Inventory Management

Topic: Management Words: 592 Pages: 2

Introduction

The company plans to use a push strategy that does not wait for customers to ask for a product. Instead, it creates products it thinks the customer will demand and then waits for orders.
Inventory management helps respond to disruptions that make it challenging to drive towards proactive and responsive value chains that ensure easy adaptation to changing demand realities.
Inventory management will provide predictive analytics that helps mitigate both understocking and overstocking.
The company has created cross-functional teams that ensure synergies between inventory management, production, planning, and logistics.

Major Problem

The company is experiencing difficulties managing a broad mix of products required and large amounts of absolute and slow-moving inventory.

Possible Solutions

Modifying the Products

Modification of products refers to changing characteristics of the products, and it is done in three ways: appearance, quality, and functions. The disadvantage of product modification is that it works only on products consistent with customer needs. Its advantages are that when functional change is applied, it improves convenience, safety, and effectiveness (Ran, 2021). In addition, operational improvements ensure redesigning of the entire product. For example, the company designs a portable computer keyboard with a backlight to ease use in a dark room.

Changing Mix Depth

Product mix depth refers to several specific products that the company is offering. Since the company is offering computer peripheral devices, it has numerous types of products. It can change its mix by reducing some products and ensuring it manufactures products it can manage easily (Kumar et al., 2019). The advantage of this is that it will eliminate obsolete and slow-moving inventory. The disadvantage of the method is that it can lead to loss of customers because eliminating some products means kicking out the buyers of removed products.

Deciding on Product Mix

Increasing product mix depth or decreasing consistency may not necessarily be a step towards improvement. Decision on product mix should be dependent on market needs and company resources. For example, management can realize particular categories of product mix in which sales are not performing well and are overstretching company resources (Singh Yadav et al., 2020). This situation requires reducing product mix depth or width, and increasing consistency will be a perfect move. This method’s advantages increase profitability and ensure better services to the target market. The disadvantages of the process are that it can eliminate products that might have higher demands in the future and decrease entrants of new customers because it focuses on retaining.

Choice and Rationale

My choice is B because it seems to handle all the company’s three main problems. To address the broad mix of product, the method suggests reducing effects that are not performing well on sales and retaining products with high sales. The process also identifies how to dispose of obsolete and slow-moving inventories (Kumar et al., 2019). Therefore, choice B is better because it handles all the problems while the other solutions handle two issues.

Implementation

To implement solution B, the steps described below should be followed systematically.

Step 1– Identify all the computer peripheral devices that the company manufactures.
Step 2– Identify products with an obsolete and slow-moving inventory.
Step 3– Disposing of all the obsolete and slow-moving inventory without manufacturing them again (this will ensure a broad mix of products is reduced).
Step 4– Advertise and sell the company’s product (this will be manageable since the company will produce fewer products).

Appendix A

Answers to Case study Questions

Question Number	Answers
	It increases the cost of goods sold, leading to profit.
	Disposing of slow-moving inventories without re-manufacturing them.

References

Kumar, M., Garg, D., & Agarwal, A. (2019). An analysis of inventory attributes in Leagile supply chain: Cause and effect analysis. International Journal of Mathematical, Engineering and Management Sciences, 4(4), 870-870. Web.

Ran, H. (2021). Construction and optimization of inventory management system via cloud-edge collaborative computing in supply chain environment in the Internet of Things era. PLOS ONE, 16(11), e0259284. Web.

Singh Yadav, A., Abid, M., Bansal, S., Tyagi, S., & Kumar, T. (2020). FIFO & LIFO in green supply chain inventory model of hazardous substance components industry with storage using simulated annealing. Advances in Mathematics: Scientific Journal, 9(7), 5127-5132. Web.