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Case2 Solution

Wheeled Coach implements ABC analysis to classify inventory items into three categories - A, B, and C - based on their annual dollar usage and total cost. Category A items represent 15% of inventory items but 70-80% of total cost, while Category C items are 5% of annual dollar volume but 55% of total items. Wheeled Coach has excess inventory due to a lack of tight physical control over stockrooms and issues with cycle counting and engineering change notices. The inventory control manager would implement cycle counting, consolidate stockrooms, and train staff to maintain accurate inventory records and support tight inventory control.

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777 views

Case2 Solution

Wheeled Coach implements ABC analysis to classify inventory items into three categories - A, B, and C - based on their annual dollar usage and total cost. Category A items represent 15% of inventory items but 70-80% of total cost, while Category C items are 5% of annual dollar volume but 55% of total items. Wheeled Coach has excess inventory due to a lack of tight physical control over stockrooms and issues with cycle counting and engineering change notices. The inventory control manager would implement cycle counting, consolidate stockrooms, and train staff to maintain accurate inventory records and support tight inventory control.

Uploaded by

Eng Osama
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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3-MRP (CASE 2)

1. Why is accurate inventory such an important issue at Wheeled Coach?


- Wheeled Coach implements ABC analysis by identifying the annual use of those ( high ,
medium, low )
high dollar items and classifying them as A. They represent some 15% of the total
inventory items, but 70-80% of the total cost.
B items are those items that are of medium value that represent 30% of the items and
15-25% of the value.
The low dollar items are class C items, which represents 5% of the annual dollar volume,
but about 55% of the total items.

2. Why does Wheeled Coach have excess inventory, and what kind of a plan
would you suggest for dealing with it?
- The inventory control manager at Wheeled Coach would want to not only have ABC
analysis but implement tight physical control of the stock room. He would also implement
a cycle counting system, and ensure that issues require engineering change notices for
those items not initially included on the bill of material. To the extent feasible, stockrooms
would be consolidated

3. Be specific in your suggestions for reducing inventory and how to


implement them.
-the inventory control manager would implement these changes through effective
leadership, hiring and training of cycle counters, and effective training and education of
all staff from engineering through cycle counters so that each understands the entire
system and the importance of maintaining accurate inventory. We would also want to be
assured that all concerned employees understand the importance of accurate inventory
records, tight inventory control, and locked stockrooms. Management would have to
exhibit the proper leadership and support of the entire system, including accurate bills
of material, rapid issuing of ECN’s, training budgets, etc.

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