D.W. Ellis & Associates Ltd. offers consulting services in inventory management education and training, inventory management project facilitating, and inventory management modeling software.

INVENTORY MANAGEMENT - A DEFINITION

The management of production, raw materials, and equipment components for the maximum overall benefit of the organization.

• if you never run out - you have too much
• if you frequently run out - you have too little
• what is the right balance for your organization

The Classic Points of View

• Those in production want more inventory
• Those in finance want less inventory

Considerations that influence MORE inventory

• equipment breakdowns
• production stoppages
• finished product shortages
• prices based on volume
• fixed ordering costs

Considerations that influence LESS inventory

• spoilage
• obsolescence
• warehouse capacity
• carrying costs
• financing costs

A BALANCE IS NEEDED

Inventory Management Software - INVENTORY ANALYSIS SYSTEM

D.W. Ellis & Associates Ltd. has developed the INVENTORY ANALYSIS SYSTEM (customized as required) for the management of your inventories. Because of an existing structure for the model, it is very quick to customize. It is Windows based, easy to use, and includes an item database. Please continue for model details or contact us for more details and examples.

A demonstration version of the model is available.

The model includes the following features:

• a data base of products that can be an extract from your files
• your own product codes can be used
• a Windows user interface
• demand for the item
• both regular and insurance items can be analysed
• comprehensive costs including
  • product costs
  • capital carrying costs
  • ordering costs
  • storage costs
  • shortage costs

The approach to ordering regular items has a 'min/max' structure. That is, when inventory drops to the 'min', product is ordered up to the 'max'. The model determines what the best 'min' and 'max' are. The user can specify a range for each of the 'min' and 'max' and the model simulates the item usage to determine the cost for each possible combination of the 'min' and 'max'. A matrix of costs is produced. The user can experiment with various sets of ranges to determine what is best.

For insurance items, the model determines if the item should be stocked. If not, it determines if the present inventory of the item should be sold or kept.

Save 25% to 45%

We have found that the cost of managing inventories that have not been analysed in this manner can be reduced by 25% to 45%.

If you have questions or comments, please e-mail .

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