Austin Wood Products Case Study Example | Topics and Well Written Essays - 1000 words

Austin Wood Products - Case Study ExampleWhen current assets ar misreported then the companys liquidity becomes deviated from its actual train. The whole interconnectedness of the mentioned problems is going to comprise strategical decisions of the company. Additionally, it is imperative to note for organizational management that inventory management is not at all a rocket science in nature but it is rather based on what humans called commonsense. The normal idea of inventory management is to maintain adequate levels of supply of raw materials and finished goods that the production cycle continues to operate while, customers do not return from the companys outlets empty-handedly respectively. The case highlights the problems that are being caused by the complete absence of inventory management system. The workers do not record changes in inventory. The sales intensiveness of the company is expected to go up by 20% in the next month and therefore, they worry in inventory mana gement system. The company in an Austin based firm and it has started its operations in 19801 and during 1983, it go to the current location in order to benefit from less formal business environment.The company has to take simple steps regarding maintaining a clearer picture of its inventory situation. They have to come up with average fill of each type of products that they can use to determine the level of order points of every item. The company is suggested to practise ABC method of inventory management which is known to divide products into three distinctive categories. Type A refers to such items which are significantly priced but their sales are slow and therefore, they generate less sales with respect to volume but at the same time, render financial benefit of notable level to their sellers. The A type of products represent 5% to 10% of the companys physical inventory whereas, they al-Qaeda for more than 40% of sales volume in monetary terms.