Inventory and Total Holding Costs
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Mabuhay Products Inc.Submitted by:Michelle MolasAdrian ManlapigAngela NunezKatrina Silvoza |
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Point of View_________________________
This case was analyzed from the point of view of Robert Ocampo, the inventory manager of Mabuhay Products Incorporated.
Case of Context_______________________
Mabuhay Company Incorporated owns 50 grocery outlets scattered around the metro but has only one main warehouse where all the goods are stored prior to delivery. The current inventory policy of the company had been practiced for the past 15 years. It mandates the monthly reorder of stocks by the main warehouse, and charging the branches with the delivery cost and a 3% financing charge per month on their inventory costs. The latter policy serves as the warehouse’s control system to the branches such that they maintain “just right” inventory.
However, the company is now getting concerned as to whether their warehouse capacity can accommodate the possible sales increase. Management is alarmed as to the possible implication of the booming sales to inventory levels in the Valenzuela warehouse and the associated costs attributable to inventory.
In order to address this pressing problem, the company’s vice-president for operations, Mr. Paul dela Cruz was tasked to assess the inventory level of Mabuhay company, as well as establish better policies with regard to inventory management. Mr. Robert Ocampo, the inventory manager of the company was appointed by the VP to make a cost analysis of the company’s inventory. Their study is aimed towards the formulation of criteria that would guide management as to the optimal order quantity, and reorder point for both products with predictable and unpredictable sales demand.
Problem___________________________
1. Using product A as a starting point, come up with a detailed study that will help establish needed criteria in deciding how much to order and when to place and order, at the same time
Mabuhay Products Inc.Submitted by:Michelle MolasAdrian ManlapigAngela NunezKatrina Silvoza |
| |
Point of View_________________________
This case was analyzed from the point of view of Robert Ocampo, the inventory manager of Mabuhay Products Incorporated.
Case of Context_______________________
Mabuhay Company Incorporated owns 50 grocery outlets scattered around the metro but has only one main warehouse where all the goods are stored prior to delivery. The current inventory policy of the company had been practiced for the past 15 years. It mandates the monthly reorder of stocks by the main warehouse, and charging the branches with the delivery cost and a 3% financing charge per month on their inventory costs. The latter policy serves as the warehouse’s control system to the branches such that they maintain “just right” inventory.
However, the company is now getting concerned as to whether their warehouse capacity can accommodate the possible sales increase. Management is alarmed as to the possible implication of the booming sales to inventory levels in the Valenzuela warehouse and the associated costs attributable to inventory.
In order to address this pressing problem, the company’s vice-president for operations, Mr. Paul dela Cruz was tasked to assess the inventory level of Mabuhay company, as well as establish better policies with regard to inventory management. Mr. Robert Ocampo, the inventory manager of the company was appointed by the VP to make a cost analysis of the company’s inventory. Their study is aimed towards the formulation of criteria that would guide management as to the optimal order quantity, and reorder point for both products with predictable and unpredictable sales demand.
Problem___________________________
1. Using product A as a starting point, come up with a detailed study that will help establish needed criteria in deciding how much to order and when to place and order, at the same time