Question

Read the Chapter 12 Case Study "Inventory Control at Wheeled Coach Ambulance" then write a summary of at least 300 words using the accompanying discussion questions to guide your essay written in APA style, with a reference page and a cover page. APA requires double space

Controlling inventory is one of Wheeled coachs toughest problems. Operating according to a stratergy of mass customization and responsiveness, management knows that success is dependent on tight inventory control. Anything else results in an inability to deliver promptly, chaos on the assembly line, and a huge inventory investments. Wheeled coach finds that almost 50% of the cost of every ambulance it manufactures is purchased materials. A large proportion of that 50% is in chassis (purchased from Ford), aluminum (from Reynolds Metal), and plywood used for flooring and cabinetry construction(from local suppliers). Wheeled coach track these A inventory items quiet carefully, maintaining tight security/control and ordering carefully so as to maximize quantity discounts while minimizing on hand stock. Because of long lead times and scheduling needs at Reynolds, aluminum must actually be ordered as much as 8 months in advance.

In a crowded ambulance industry in which it is only giant, its 45 competitors don’t have the purchasing power to draw the same discounts as Wheeled Coach. But this competitive cost advantage cannot be taken lightly, according to President Bob Collins. “Cycle counting in our stockrooms is critical. No part can leave the locked stockrooms without appearing on a bill of materials.”

Accurate bills of material(BOM) are a requirement if products are going to be built on time. Additionally, because of the custom nature of each vehicle, most orders are won only after a bidding process. Accurate BOMs are critical to cost estimation and the resulting bid. For these reasons, Collins was emphatic that Wheeled Coach maintain outstanding inventory control.

Answer 1

Managing inventory is one of the important decision that need to be taken by every organization in order to go with the production process smoothly and avoid any kind of interruption in the process. Improper inventory management can result into chaos in the assembly line, improper management and hence delayed production.

The Wheeled Coach Ambulance is facing the big time problem of managing the inventory and reducing the cost involved in inventory management. In order to maintain coordination in the assembly line and reduce the inventory cost, it is important to keep a strong check on the inventory line. It was noticed that most of the cost that the organization bears was related to the purchase of inventory which production of automobiles. More than 50 percent of the cost was associated with the purchase of the raw materials such as the chassis (purchased from Ford), the aluminum (purchased from Reynolds Metal) and the plywood (purchased from local suppliers).

Efforts are put by the company to keep a strict check on the inventory ordered so that they can avail the maximum benefits of quantity discounts. Moreover the lead time for the products is more, so inventory need to be ordered 8 months beforehand. Another problem that the company faces is counting the inventory in stockrooms. As the stored inventory is more so counting the inventory is a tough task for the workers, as a result true prediction as to when and how much inventory to order becomes tough.

Above all every bit of the inventory that is stored in the warehouse is recorded in the 'Bills of Material'. This is also a problem that is faced by the company, as keeping a record in the BOM takes time, without which the inventory cannot move out of the warehouse and hence resulting into delayed production.