Inventory Management for EMC Research Paper Example | Topics and Well Written Essays - 1000 words - 1

Inventory Management for EMC - Research Paper ExampleFigure 1 indicates that most of the goods be work-in-progress. At the beginning of the year work-in-progress (WIP) represented approximately 39% of the goods in stock, destroyed goods 25, raw materials 21% and purchased parts 15%. At the end of the period they represent 36%, 28%, 19% and 17% respectively. According to Wong (2006) the first step in determining an livestock situation stub be facilitated through the use of first principle analysis. This analysis determines the immenseness of items and the level of controls placed on them. apply the relative proportions of cost of goods sold for the companys product line the relative proportions of the different line types are shown in Table 1 below.The actual raw material and purchased parts that are utilize to make the different products in each product line has not been identified but it shows that 37.48% are decorative hardware, 27.25% construction hardware, 25.85% Cabinet Hardware and 9.42% Fasteners.In order to improve the inventory situation at EMC the company should first apply ABC analysis. ABC analysis places emphasis on the value of inventory (Wong n.d.). Focusing on inventory with the highest value can allow companies to assign the necessary resources to achieve the optimal inventory levels and in so doing reduce inventory cost piece of music ensuring that customers needs are met (Wong n.d.). ABC analysis when applied to EMCs inventory situation will help the company determine the importance of items and the level of controls that should be placed on them. The majority of EMCs inventory relates to items used in the payoff of decorative and construction hardware. These could be described as the A items because they are of higher value while those used in the production of cabinet hardware would be the B items, and fasteners - C items. The A items (a conspiracy of decorative and construction hardware