Consolidated Electric Case Study

Executive Summary Consolidated Electric (CE) is a mid-Western wholesale distributor of electronic goods for the construction industry. These include wire, electric boxes, connectors, lighting fixtures and electrical controllers among others. The political party carries 20,000 separate line items in inventory that ar produced by over 200 manufacturers. Items are priced from under bingle cent to several hundred dollars. The top 2,000 items produce 50% of sales, the next 8,000 items account for 30% of sales while the concluding 10,000 create only 20% of sales. Consolidated Electric continuously purges crossings so that they carry only items that are ordered at least once a year so that the bon ton can maintain a policy of Good node service at a reasonable cost. Inventory way has been operated under a system referred to as earn and turn. down the stairs this program the company hangs a ratio of gross get ahead margin multiplied by inventory turnover that essential meet company requirements of 2.0. This level is subject to change and is set at the beginning of each year by Joe Henry, the companys owner. However, this method, while effective in controlling positiveness of the business and product lines, is an ineffective means for controlling inventory.

roughly stockout conditions result while other items are ordered in sufficient quantity to last years. Individual line items are managed under a cardex running inventory system where product is recorded as it arrives from the manufacturer and then reduced as sales are made. Each card includes a order point that is determined by judgment and past experience. card game are reviewed weekly and reorder quantities will range from a months supply for more expensive items to a three month supply for those that are less costly. everyplace the past two years the company has shown interest in converting to a computer driven system, but it is far from skilful implementation. While the data used has been accurate when compared to accounting records... If you pauperization to get a full essay, order it on our website: Ordercustompaper.com

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