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Hrm 531 Week 4 Paper

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E. Identify the inventory management method you recommend, and explain why this method will benefit the company. “Inventory management is a practice of tracking and controlling the inventory orders, its usage and storage along with the management of finished goods that are ready for sale” (Borad 2018). It is crucial that a company has an inventory management technique in place because the lack of an inventory management system results in increases in storage fees and idle production times, frozen working capital, and the wasting of materials and labor resources. The company also experiences a decrease in revenues and customer satisfaction. For example, Hampshire Company currently utilizes Manufacturing Resource Planning (MRP) to manage its inventory. Under the MRP inventory management method, the amount of inventory to be produced is based on the anticipated yearly sales forecast. …show more content…
If Hampshire Company management is looking to see improvements within a year, the company can implement process benchmarking to improve its current processes and increase the company’s bottom line. For example, Hampshire Company is looking to decrease its direct labor costs from $120,000 to $100,000 within the next six-months. Hampshire Company visits East Coast Umbrella in North Carolina and learns that the company has implemented temporary staff and robotics to reduce labor costs. Hampshire Company researches temporary staffing agencies in the area and various robotics vendors. The implementation of temporary staff and robotics reduces labor costs by reducing full-time benefits and 401K contributions. However, the costs associated with the running and maintenance of the new machinery will increase manufacturing overhead (Umbrellas Manufacturers in the United States n.d.) (Johnston 2017) (Suttle 2017) (English

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