INTRODUCTION Inventory Management An Inventory is a Stock or Store of goods kept to meet customers expected demand. Inventory can also be defined as the stored accumulation of transformed resources in a process, and it usually applies to material resources but may also be used for inventories of information. Almost all operations keep some kind of inventory, most usually of materials but also of information and customers (Customers inventories are normally called Queues). These inventories can take
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analysis of the supply chain where transportation, warehousing, inventory, and customer demands were all considered. Our rail transportation provider offered discounts and gave three options to choose from. They will provide a lower price per tonne if we were to take advantage a multiple car rate of either: 25, 50, or 100 rail cars when transporting bulk flour from the mill to Alberta. Warehousing decisions were based on associated carrying costs, frequency of deliveries, and demand needs. Safety stock
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QUESTIONS 1. Calculate a few ratios and compare Reed's results with industry averages. (Some industry averages are shown in Exhibit 4.) What do these ratios indicate? 2. Why does Holmes want Reed's to have an inventory reduction sale, and what does he think will be accomplished by it? 3. XXXXX XXXXX had adopted a very loose working capital policy with higher current assets than industry averages. If he merely tightens his working capital policy to the averages, should this affect his sales?
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REVIEW OF SUPPLY CHAIN MANAGEMENT CONCEPTS AND THE BULLWHIP EFFECT H.M. Lai1 1Faculty of Engineering, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia. ahiu_mun@hotmail.com Keywords: Supply Chain Management, Bullwhip Effect, Inventory. Abstract. In recent years, the application of supply chain management in organization has become very popular. Business organizations today increasingly use the vital role of supply chain management to compete. This paper presents the basic concepts
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myself have not properly framed the supply chain value proposition to them. After years of justifying supply chain investments to various CEOs and Boards based on improving and sustaining product availability, driving inventory productivity, and driving transportation and warehousing cost productivity, I found linking supply chain performance to shareholder value creation still missing. Over time, economic profit strongly correlates to increasing shareholder value in public firms. A supply chain that
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700 at unit cost HK$ 100. (Total original cost is 700* HK$100= HK$ 70,000) The company hope to sell these at 30% profit per unit. (Price HK$ 130). Assuming holding the inventory for 1 year would lead to inventory cost and the number of it is 25% of the original cost (25%* HK$ 70,000= HK$17,500). Cost of holding each one of the components is HK$17,500/700= HK$ 25 per unit per year. So, the actual cost after holding the inventory 1 year has changed to: HK$ 100+ HK$ 25= HK$125; so cost after holding
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1. Discuss the working capital management? Working capital management Working capital management refers to the administration of current assets and current liabilities. Liquidity management involves the planned acquisition and use of liquid resources over time to meet cash obligations as they become due. The firm’s liquidity is measured by liquidity ratio such as current ratio, quick ratio, cash ratio. Financing current asset Current Assets require financing by use of either current funds or
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Chapter 6 Discussion Questions |6-1. |Explain how rapidly expanding sales can drain the cash resources of a firm. | | | | | |Rapidly expanding sales will require a buildup in assets to support the growth. In particular, more and more of the | | |increase in current
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as: The production costs of chickens raised for an egg-laying unit shall include the initial cost of the birds (or, if hatched, the costs of eggs and hatching expenses), the costs of materials and labor, and allocated indirect costs during the prematurity period. 4. According to FASB ASC 905-330-25-3, a flock of egg-laying hens are classified on the balance sheet as follows: Animals with short productive lives, such as poultry, may be classified as inventory. Due to the short productive
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in and first out. LIFO is a valuation method of inventory. The other valuation methods of inventory is FIFO, which stands for first in and first out and weighted average. FIFO is a popular valuation method along with LIFO. LIFO has its advantages and disadvantages. The advantages of LIFO is that current product is measure along with its current revenues. The current market prices are matched up with current revenues. As for FIFO the older costs is matched with the recent revenues, which understates
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