Explore BrainMass

Inventory Costs: LOG 401

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Identify an example of inventory in your own life. Estimate how much it costs you to hold this inventory. Estimate the "ordering cost" when you take something out. How often do you replenish this inventory and do you have any inventory policy such as first-in-first-out, last-in-first-out, etc.?

© BrainMass Inc. brainmass.com October 25, 2018, 9:46 am ad1c9bdddf

Solution Preview

Inventory management occurs not just at the warehouse, but in one's own life as well. Consider all the items we use that take up space in our homes. Typical items include food and household supplies. Inventory management for these items differs based on the characteristics of the items. Food could be classified into perishable items, and non-perishable items. Perishable items such as milk and fresh meat need to be refrigerated or frozen. This increases their holding costs, as a refrigerator is a prime location with operating costs including the cost of electricity and cleaning costs. Other perishable items such as bananas and potatoes do not require refrigeration, but, nevertheless, do need shelf space in a cool, dry area. Non-perishable items such as canned food, toilet paper and soap do not need to be refrigerated, and can be stored indefinitely if care is taken to prevent damage.

There is only a limited amount of space in every home, which means that owning one item may mean not being able to own another item due to the lack of space. Inventory management is a balance between carrying too much inventory and too little, while managing the limited space available. Carrying too much inventory leads to unnecessarily high inventory-carrying costs, and, in the case of perishable items, can lead to wastage if the food is not consumed in a timely manner. Perishable items require a high turnover rate to decrease wastage. Carrying too much non-perishable items could lead to ...

Solution Summary

Answered in 1,029 words. Inventory holding costs and ordering costs are calculated for a common household item. All calculations are shown. Any assumptions made are stated.

See Also This Related BrainMass Solution

E-Business Functionss

My organization has determined that its e-Business functions are not "cutting edge" and, thus, the organization is losing its competitive edge. The organization's business development department has done some preliminary market and competitive intelligence research and identified the following business projects that should be investigated:

1. Develop and implement a new website or enhance an existing website to include online catalog sales.
2. Develop and implement a new website or enhance an existing website to include customer service. This might include features for self-service or use of real-time customer support.
3. Develop and implement an EDI system to receive requirements/orders from large customers and send requirements/orders to vendors.
4. Develop and implement a new website or enhance an existing website to show real-time inventory available for sale and customer order status.
5. Develop and implement a new intranet-based system or enhance an existing intranet-based system that supports employee human resource features such as viewing/modifying benefits, payroll viewing and deduction modification, viewing/modifying 401(k) benefit, etc.
6. Add m-business capabilities to existing Internet infrastructure.
7. Add audio/video capabilities to existing Internet infrastructure
8. Add Internet-based advertising capabilities (e.g. pop-ups, banners, pop-overs, etc.).
9. Develop and implement a new website or enhance an existing website to support the organization's inside and outside sales force.
10. Develop and implement a new website or enhance an existing website to provide ERP capabilities.
11. Select your own. Based on research, students will select a business requirement not already covered in this list.

Each business requirement should be something that the organization either does not have or has but could improve with new technology. Review each business requirement to determine which ones your organization might implement. You must select at least two to be implemented.

Write a Business Requirements Analysis that clearly defines the two requirements you selected and the rationale for your selection. Include all the 'use cases' that an IT department would need to know about in order to analyze and design technology solutions for the requirements.

The 'use case' is a technique for capturing system requirements. Use cases are scenarios written in regular (non-technical) terminology to describe how a system interacts with a user or another system. For example, a use case for an ordering process might include the following steps: (1) customer places order, (2) order requests item, (3) item bills invoice, (4) customer receives invoice, (5) customer sends payment, (6) payment closes invoice.

Company Background

My organization is a small government run office that is responsible for ensuring the effective and efficient implementation of federal pensions law and regulations. It has all the usual small government problems. Lack of man-power, lack of funding, lagging behind the times, etc.

There main areas of focus of the office are: 1) ensuring employers are registering pension plans with pension administrators in a timely fashion. 2) investigating complaints of non-compliance with pensions law and prosecuting where appropriate. 3) developing public awareness campaigns for both employers and employees. 4) provide appropriate advice to pension administrators, employers and employees.

Being a government entity, there is no real competition, but rather that a service must be offered to employees, employers and pension administrators to ensure compliance of appropriate law.

Our office does not have very effective tech capabilities. Being part of government our office does not have its own IT Dept, but rather a shared one that is spread out between all government offices, so they must meet many demands. Our technology consists of internet, intranet and e-mail, nothing more.

It may be ideal to consider being able to access other agencies software, such as immigration, the pension plan administrators, the prosecutors office, the business license office, etc., so that research can be done 'in office' rather than making constant requests to external agencies. Also, there is an office website, but it is poorly developed. Other areas to consider are ways to reach the 'public' more efficiently and increase internal communication as well.

View Full Posting Details