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This was an A paper
As organizations grow historically over a period of time, certain systems and practices that were once effective and desirable become counterproductive in a changed environment. Hence it is essential to periodically examine the systems and practices and make the required changes. A change in the top leadership provides an opportunity to do this.
Inventory levels are always a worry for top management and rightly so because high inventory levels block up operating funds and hence add to costs. There are two types of finished goods inventory levels. The inventory levels of MTS products exist awaiting orders from customers. Some of these MTS products are slow moving and can be shifted to the MTO category. However this needs to be done in consultation with the customers of these products so that they are not inconvenienced. To simply reduce the level of the MTS products can adversely affect customer service levels, because of stock outs. In order to effectively reduce the inventory levels a greater co-ordination is required with the customers. The regional distributors need to have better forecasting techniques. Such techniques will help the company and distributors both to reduce inventory levels. E-commerce is a great tool for reducing lead times. (Stevenson, 2007, p.696) Electronic and continuous access of inventory levels with the distributors can lead to automatic generation of production schedules without having to wait for distributors to place orders. The inventory levels of MTO products exist awaiting production of minimum shipping lo ...