Running head: INVENTORY MANAGEMENT 1 INVENTORY MANAGEMENT 3 Inventory Management: Desmond K Sangbong Gerald Fritch Colorado Technical University May 27, 2015 Executive Summary The purpose of this assignment is to discuss the standard operating procedures that are necessary for proper inventory control. In order to achieve proper inventory in the company, it is important to have the right operation procedures. The assignment will hence discuss these procedures in line with the inventory management for the company. There will be a detailed analysis of each procedure that will give an insight of effective control of inventory to ensure that there are no losses on company’s inventory. In the assignment, there will a detailed analysis of the following procedures as they apply to inventory control in the company; cycle counts, ABC items, damages, overages and shortages. These procedures shall remain the focus of the assignment as they help in achieving the success of effective inventory control. In this case, the inventory is an important factor of production in the company. Cycle count is a very important procedure that can help to achieve the success of the company in terms of inventory control. It refers to the time interval of placing a new order of inventory. The company should place a new order within reasonable intervals. The time interval should be well set to ensure that there are no delays in production of goods. If there is a poor timing during placing an order, there are chances that there will be a delay in the production of goods in the company (Parkin, 2014). The delay is likely to occur since the suppliers take time in preparing the order. The delivery might be made late when the entire inventory is over hence creating delay in production. The company might end up losing some sales as some customers will seek for alternative places to buy the missing products. In this scenario, the company should ensure that there is a proper cycle count to avoid any problem that might lead to delays in production. The other standard operating procedure is ABC items. In this procedure, a company should always make a list of inventory and prioritize each item based on its importance to the production of goods. The company should hence order for the inventory of high priority first. Then, the other inventory items should be ordered later on. This is important as it will ensure that the most important inventory items are received first (Parkin, 2014). The production of goods can hence continue once the important inventory items are received. The other units can be received later and hence there is no effect on production. It is important for the production manager to have the list first and ensure that there are no delays in production. It is important as there will be adequate inventory all the time hence success in production of goods. The third standard operating procedure that is necessary for effective inventory control in .

1. Running head: INVENTORY MANAGEMENT 1
INVENTORY MANAGEMENT 3
Inventory Management:
Desmond K Sangbong
Gerald Fritch
Colorado Technical University
May 27, 2015
Executive Summary
The purpose of this assignment is to discuss the standard
operating procedures that are necessary for proper inventory
control. In order to achieve proper inventory in the company, it
is important to have the right operation procedures. The
assignment will hence discuss these procedures in line with the
inventory management for the company. There will be a detailed
analysis of each procedure that will give an insight of effective
control of inventory to ensure that there are no losses on
company’s inventory. In the assignment, there will a detailed

2. analysis of the following procedures as they apply to inventory
control in the company; cycle counts, ABC items, damages,
overages and shortages. These procedures shall remain the focus
of the assignment as they help in achieving the success of
effective inventory control. In this case, the inventory is an
important factor of production in the company.
Cycle count is a very important procedure that can help to
achieve the success of the company in terms of inventory
control. It refers to the time interval of placing a new order of
inventory. The company should place a new order within
reasonable intervals. The time interval should be well set to
ensure that there are no delays in production of goods. If there
is a poor timing during placing an order, there are chances that
there will be a delay in the production of goods in the company
(Parkin, 2014). The delay is likely to occur since the suppliers
take time in preparing the order. The delivery might be made
late when the entire inventory is over hence creating delay in
production. The company might end up losing some sales as
some customers will seek for alternative places to buy the
missing products. In this scenario, the company should ensure
that there is a proper cycle count to avoid any problem that
might lead to delays in production.
The other standard operating procedure is ABC items. In
this procedure, a company should always make a list of
inventory and prioritize each item based on its importance to
the production of goods. The company should hence order for
the inventory of high priority first. Then, the other inventory
items should be ordered later on. This is important as it will
ensure that the most important inventory items are received first
(Parkin, 2014). The production of goods can hence continue
once the important inventory items are received. The other units
can be received later and hence there is no effect on production.
It is important for the production manager to have the list first
and ensure that there are no delays in production. It is important
as there will be adequate inventory all the time hence success in
production of goods.

3. The third standard operating procedure that is necessary
for effective inventory control in the company is damages. It
refers to the inventory that is destroyed within the warehouse.
In order to achieve efficient inventory control, the procedures to
maintain the damages on inventory are necessary. The company
should have a good way of handling inventory while in the store
to avoid or minimize the damages. Reducing these damages
might require training of the employees who work in the stores.
The training can help these employees to achieve a better way
of handling the inventory and hence achieve success in the
future. The company should also have specific ways of handling
the damaged units of inventory to avoid spread of damages to
the inventory in the right state (Cornes, 2011). With this in
place, there will be effective inventory control in the company
hence easy to achieve the desired production levels.
The other important operational procedure that can lead to
effective inventory control is overages. It refers to the inventory
that has been in the store for too long than the expected time. If
the inventory takes a longer period in the store than expected,
then it will obviously become obsolete (Neumann, 2012). It
means that the inventory will not be of any use to the
production of goods. To avoid this, the company should only
order for inventory that is adequate enough to produce the
required level of output. The overage inventory should be
disposed or even returned to supplier. It will hence lead to
better inventory control in the company.
The final operating procedure is shortages. It refers to a
situation where the required inventory items are not adequate to
meet the production needs of the company. The company hence
cannot produce the desired output units (Neumann, 2012). To
avoid such losses, the production department should be keen
when placing an order. The order should contain the necessary
units of inventory to ensure that no shortage arises in the future
hence smooth production of goods.
Conclusion
Concluding on the assignment, the five standard operating

4. procedures are important at ensuring effective inventory control
in the company. Cycle counts, ABC items, damages, overages
and shortages are the important procedures that the company
should adopt in ensuring there is effective inventory control
hence avoiding possible losses.
References
References
Cornes, R., & Sandler, T. (2011). Inventory management.
Cambridge [Cambridgeshire]: Cambridge University Press.
Parkin, M. (2014). Inventory Control and management. Reading,
Mass.: Addison-Wesley Pub. Co.
Neumann, J., & Morgenstern, O. (2012). Inventory Control:
Princeton University Press.
Running head: OPERATIONS GROWTH 1
OPERATIONS GROWTH 4
Operations Growth:
Desmond K Sangbong
Emmet Fritch

5. Colorado Technical University
May 26, 2015
Executive Summary
The main aim of this is to discuss the current period of
growth in the company and see how it can easily handle the
changes. The outline will explain why the operation should
grow in order to handle the current expanding needs. In this
case, it is absolutely important to include the specific
approaches that will handle the current expanding needs in the
company in line with the entire structure of the organization.
The outline also explains the necessary steps that the operation
should follow to cater for the high rate of growth in the
company and ensure that everything runs as per the company’s
goals and objectives. The outline will also give the best
recommendations for the company to ensure there is smooth
flow of operations while reducing the general expenses of
running the activities of the company.
In this company, since there is a high growth in the basic
activities, the operations need to grow in order to be compatible
with the high rate of growth. In this case, the number of
employees should increase from the current capacity. The main
reason for this is to increase the value of the company. If the
number of employees increases, then the company will be in a
position to produce the required level of output every month.
The company will hence make more sales since there will be
mass production of goods. The increased sales will increase the
profitability of the company hence improving on its value.
In order to handle the increasing demand of customers, it

6. is important that the company increases their level of operations
(Steve, 2012). Since the company was receiving fewer orders
before, the operational managers should be plan on how to meet
the increased demands by the customers. In this perspective, the
company should allocate more resources to their production
units. It will hence help the company to produce more goods
and hence meet the demands of the company.
In line with the expanding needs of the company, the
company should be prepared to increase their re-order level of
their inventory. The inventory should increase to make it easy
for the production department to produce goods that will meet
the customers’ demand. Since the demand of good is also high,
the company must produce high quantities. It is very essential
as it will ensure that no shortage takes place. It will hence be
sure that the revenue of the company shall continue increasing
since the sales shall be high as well. In line with increasing the
re-order level of the company, the supply department should
liaise with the suppliers to ensure that there is a constant supply
of high quality raw materials (Alex, 2014). The reason behind
this is ensuring that there is no shortage of raw materials and
that the raw materials are of high quality to reduce time wastage
during for checking the supplied materials.
Concluding on this, it is important for the operations of the
company to grow in order to satisfy the expanding needs. The
various methods discussed above require implementation to
ensure that there is a reliable supply of commodities to
customers to satisfy their high demand of the commodities. By
doing this, the company will realize more sales hence increasing
on the profits.
References
Alex, J. (2014). Human Resources. Swindon: BCS Learning &
Development Limited.

7. Steve (Firm). (2012). Operations and company’s growth. New
York, NY: Datamonitor.
ABC Inventory & Supply Chain
Desmond K Sangbong
Emmit Fritch
Colorado Technical University
May 22, 2015
ABC Inventory and supply chain management system
Inventory system is the system implemented in an organization
using various methods and techniques to keep appropriate
records, implement proper control on the level of stocks, ensure
proper recording systems involving bin cards, stock cards,
goods receive note and others to help an organization in
inventory storage supply, handling and other activities in order
to achieve effective coordination and optimal expenditure on
the inventory to maintain profitability
Inventory also referred to as stock is the goods and materials
held for the purpose of resale and or production purposes.
Supply chain management refers to the process of identifying a
companies need in terms of materials and products,
identification of the supplier, ordering for the products from the
supplier, receiving of the products, appropriately inspecting the
products, checking their quantity and quality, recording the
appropriately in the goods received note and facilitating their
payments.
Current issues with ABC company inventory system

8. After analysis of the current ABC inventory system several
challenges were evident including
Forecasting
Inaccurate determination of need
Challenges of decentralized system
Lack of system optimization
Improper recording of misplaced items
Forecasting
no proper forecasting method is in place to determine demand
and supply of products. ABC has been basing their focused on
the past demands and averaging it to determine focus for the
next period.
Inaccurate determination of need
There were gaps identified between what the system needs and
what available with the current system. There has been so many
incidences of inventory shortage which have lead to rush
purchasing decisions and sometimes over stoppage of
production, on top of that there have been incidences on stock
piling leading to higher storage cost, pilferage and even stock
close due to mishandling of items and pilferage,
Challenges of decentralized system
ABC inventory system is decentralized even though
decentralization initially is less costly it has challenges in real
time inventory reporting and affects accuracy of purchasing due
to the fact that the purchase order from a particular unit moves
through different people to reach the purchasing unit and
sometimes it causes bottlenecks in purchasing hence delaying an
item purchased.

9. Lack of system optimization
ABC inventory system does not account for raw materials and
products that have been lost through pilferage and breakages
during production and does not keep record of the quality of
products supplied so as to involve the purchasing unit of the
need to change the supplier and improve the storage facilities so
as to minimize the losses.
Improper recording of misplaced items
ABC has no standard procedures to report lost or stolen stock
and clear indication of operating procedures that include
checking in of products, storage of stock items, lack of
technology involvement that easily identifies items location and
also periodic physical stock taking have largely been ignored.
Recommendation
For an effective inventory management system there is need to
develop a design with fewer problems of managing and running
it with clear and simple application methods, understandable
and has all round functions that ensure each and every aspect of
inventory control is captured and kept in line with the
shareholders need for profit maximization.
A robust inventory system should be
Involve forecasting
Use centralized system
Have optimal usage
Have accurate need analysis
Proper record keeping
Involve forecasting

10. An effective forecasting method should be put in place to
reduces incidences of stock outs and overstocking working
along with economic order quality and reorder point model to
factor in seasonal sales and analyze periodic needs and
effectively taking into account cost associated with the levels of
stocks that will ensure efficiency is enhanced.
Optimal usage the system
Optimized usage and capture of data has so many cost
associated with It including cost occasioned by delays in
inventory purchasing and stoppage. It is important for ABC to
centralize its inventory control system so as to optimize on cost
control measures to reduce wastage and stoppage delays and to
be able to identify and account for stock avail betaking into
account pilferage stock losses relating to wastage. The system
must capture the right data In real-time platform to avoid
mistakes and inappropriate inventory levels
Use of centralized system
I recommend ABC to flash track centralization of its inventory
system so as to reduce cost associated with the decentralized
system which is more costly to integrate the inventory system
with the sales system to ensure real time inventory reporting,
increased accuracy, perfect of inventory purchases and timely
and accurately data entry so as to remove un necessary
bottlenecks in purchasing unit.
Accurate need analysis
I also recommend the prioritization of needs in that the order
level of fast moving materials and product be given priority
over slow moving products and ensure they are given storage
space and facilities taking into account sales focused, quantity
demanded, seasonal issues relating to raw materials and also the

11. economic order level so as to order efficiently and effectively
minimizing the handling cost, storage cost and cost of
maintaining the products and wages relating to employees who
take care of the products
Proper record keeping
I recommend that ABC company should keep proper records and
always prepare related reports and make them available during
inventory checking and audits. There is need real time recording
of stocks , bin cards and stock cards. They should be maintained
and attached to the appropriate stock indicating the balance of
material at hand and tally with stock ledgers. Stock ledgers
should indicate receipt of materials and products, opening and
closing balances and verification and inspection done regularly.
Material issue indicating the departmental issue, the bearer of
the issue and be kept in a triplicate manner signed and
authorized and charged appropriately to departments. ABC
should ensure maintenance of proper record of good received
note and material return note.
conclusion
Inventory management and supply chain management is the
backbone of nay organization as it impacts on several
departments and its efficiency and minimization of impact on
sales and customer benefit from low coast of production
handling storage and ensured the goal of profit maximization is
applied and maintained
reference
Online supply inventory system (online) available at
http://www.slideshare.net/rokista/online-supply-inventory-
system
Jose L. Gonzalez, Daniel González Analysis of an Economic

12. Order Quantity and Reorder Point Inventory (online) available
at
http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1
006&context=imesp