The president and CEO of Alexander & Thurston has expressed the opinion that there is too much spare-parts inventory in the system. He believes that, through better inventory management, inventory can be reduced from its present level while customer service is improved. He has told the manager in charge of the DC in no uncertain terms that his job depends on showing tangible improvements in operating performance over the coming year.
Alexander & Thurston Inventory Management
by: Wallace Hopp
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After reading and discussing the material, students should:
- Determine if the president right. Is it possible to have less inventory and a better fill rate?
- Identify if the new policy is better than the old one.
- Determine if there is there a better policy that the president could use that is practical to implement within the current information system.
- Explain how the president should allocate inventory between the DC and the field. Is there a way to evaluate whether his current allocation is appropriate?