Case Study: Throsel Teskey

I do not think the budget is reasonable at around 5,000,000 because I think 5,000,000 is too low of an inventory budget. The inventory budget premerger in October was 5,990,000. We need to get it down to around 5,500,000 which would be the sweet spot for Throsel-Teskey. Sales have been around 6,000,000 so we don’t want to have to small of a budget at least at first. Within the first year or two I think the budget should be around 5,500,000 so we don’t decrease sales as quick. Now in a couple years we could lower the inventory budget down to 5,000,000 but not anytime soon.
Possible reasons for the inventory problems could be that employees were not motivated after the merger. Some employees maybe felt betrayed and did not agree with the decision …show more content…
However, since the merger, sales and inventory levels have gone up greatly. John thought by combining both company’s inventories, having bulk discounts, and a limited number of suppliers would result in Throsel-Teskey having a decline in inventory. It didn’t work and it needs to be reversed because the inventory numbers are getting out of control. If inventory doesn’t decrease soon it will be catastrophic for the …show more content…
This will provide accurate data to inventory replenishment. It will help Throsel-Teskey make smart decisions regarding how many materials to buy. The system needs to be kept up to date consistently and there needs to be employees that are well trained to control inventory and forecasting. Second, I would merge the Albuquerque warehouse to the Phoenix warehouse. The Albuquerque warehouse has $1,452,000 total inventory compared to the $4,889,500 inventory at the Phoenix warehouse. The Albuquerque warehouse takes the back seat to the main warehouse, Phoenix and the Albuquerque warehouse needs to be shut down because it doesn’t benefit Throsel- Teskey ever since the merger