Inventory Analysis of Woodstock Appliance

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Project One Woodstock Appliance Company October 21, 2014 Executive Summary The objective for the Woodstock Appliance Company in this project is to minimize their total cost, which is combined by annual ordering costs and annual holding costs, specifically total annual inventory cost. In this report, it is our job to find the most optimal solution by analyzing the numerical information that is given in the table. By analyzing the four different products carried by the Woodstock Appliance Company, this report presents a framework of best practice that can be applied to reduce the total cost associated with demand planning for the managers of this company. Three different models are presented in this report by using our original data/ numerical information to try to find the most economic and optimal way to help the Woodstock Appliance Company to minimize total cost and have the most efficient ordering system. This then allows the managers to compare the differences among the three models and figure out which model is the most suitable for the company’s operation. In other words this model will provide a simple inventory control policy. In addition, different ordering cycles will change the total costs substantially; therefore, by rounding down or up to whole numbers for the ordering cycle then this will stop fluctuations in total cost. As a result, scenario 3 in model 3 should be the most optimal solution to the managers. Table Of Contents * Introduction * Findings * Conclusion * Appendices Introduction The Woodstock Appliance Company carries four different products, but they need help in finding the best economic order quantity to minimize total inventory holding costs and ordering costs. The company’s four different products each have different annual demand, order cost, holding cost rate, purchase price and space/unit which makes

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