Problem Identification and Issues Franklin Fan Company is a manufacturer and distributor of electric fans. It was founded by two engineers, Dan Block and Ed Spriggs, one an electrical engineer, and the other a mechanical engineer. Located in Block’s garage, the company showed slow and steady growth for seven years, however, when it was shifted to old, abandoned meat-packing warehouse on Chicago’s South Side, the company’s led to an explosive growth of the business. Due to increased space for manufacturing and storage of inventory, the company offered the wide variety of fans and after fifteen years, Franklin Fan was the biggest independent manufacturer and distributor of fans in the north-central region.
Relocated to the new office, warehouse, …show more content…
• The company should keep proper stock of all types of fans to avoid backorders.
Difference between Periodic Review System and continuous review system
The most important step for any company in business that sells material goods is to keep track of its inventory. The two most common methods to track inventory are
• Periodic Review system
• Continuous review system
Periodic Review System
The counting of inventory at a specified time is called periodic review system. For instance, under a periodic review system, a retail store may check inventory at the end of each month.
Pros of Periodic Review System
• A periodic review system saves time for the manager or personnel performing this duty, providing him time to perform other business related activities.
Cons of Periodic Review System
• It does not provide accurate inventory records for businesses with high sales.
• Accounting is less accurate with this system.
• It is not sure when reordering is required.
Continuous Review …show more content…
For instance, a retailer may use barcode scanners to record updates each and every time a cashier scans a product code for the customer. The continuous Review system is also called perpetual Review System.
Pros of Continuous Review System
• It provides real-time updates on inventory.
• Accurate information about reordering.
• Accurate accounting in the perpetual review system.
Cons of Continuous Review System
• It involves high cost because computer system, bar codes and scanners are vital to configure continuous review system.
Adopt Periodic Review System or Continuous Review System?
It depends on several factors whether to adopt continuous review system or periodic review system. These factors include sales of business and number of personnel handling inventory.
For example, a sole proprietorship with limited sales may not require adopting continuous review system however a large retailer with huge sales and limited employees may require continuous review system to maintain the level of accuracy for business.
References
Sushil Gupta. Martin Starr. (2014). Production and Operations Management Systems (p. 171). CRC
Relocated to the new office, warehouse, …show more content…
• The company should keep proper stock of all types of fans to avoid backorders.
Difference between Periodic Review System and continuous review system
The most important step for any company in business that sells material goods is to keep track of its inventory. The two most common methods to track inventory are
• Periodic Review system
• Continuous review system
Periodic Review System
The counting of inventory at a specified time is called periodic review system. For instance, under a periodic review system, a retail store may check inventory at the end of each month.
Pros of Periodic Review System
• A periodic review system saves time for the manager or personnel performing this duty, providing him time to perform other business related activities.
Cons of Periodic Review System
• It does not provide accurate inventory records for businesses with high sales.
• Accounting is less accurate with this system.
• It is not sure when reordering is required.
Continuous Review …show more content…
For instance, a retailer may use barcode scanners to record updates each and every time a cashier scans a product code for the customer. The continuous Review system is also called perpetual Review System.
Pros of Continuous Review System
• It provides real-time updates on inventory.
• Accurate information about reordering.
• Accurate accounting in the perpetual review system.
Cons of Continuous Review System
• It involves high cost because computer system, bar codes and scanners are vital to configure continuous review system.
Adopt Periodic Review System or Continuous Review System?
It depends on several factors whether to adopt continuous review system or periodic review system. These factors include sales of business and number of personnel handling inventory.
For example, a sole proprietorship with limited sales may not require adopting continuous review system however a large retailer with huge sales and limited employees may require continuous review system to maintain the level of accuracy for business.
References
Sushil Gupta. Martin Starr. (2014). Production and Operations Management Systems (p. 171). CRC