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Harvey

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Words 1515
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Running Head: HARVEY INDUSTRIES 1

Harvey Industries
Mellisa Gonzales
BUS 644: Operations Management
Dr. Andrew Jackson
January 16, 2012

HARVEY INDUSTRIES 2
Harvey Industries
Harvey Industries, Inc, a Wisconsin company has been experiencing a loss of financial gains over the past four years. The company specializes in the assembly of high-pressure washer systems and in the sale of repair parts for these systems. As a consultant hired by the company there has been an overview of operations. During this overview, there has been improvement opportunities identified to decrease waste and increase profit. There will be recommendations made that will allow the company to manage inventory and supplies more profitably. These recommendations will assist in changing the current financial situation they are experiencing of a negative return on sales of -1.39% (net loss/total sales = $17,174/$1,238,674).
Inventory Management Inventory control is vital to an institution and its financial well being. To be effective, management must have the following systems in place to ensure efficiency.
A system to keep track of the inventory on hand and on order, a reliable forecast of demand that includes an indication of possible forecast error, knowledge of lead times and lead time variability, reasonable estimates of inventory holding costs, ordering costs, and shortage costs and a classification system for inventory items (Stevenson, 2009).

The current inventory control “system” for Harvey Industries includes the stock being replenished by the stockroom foreman, the purchasing manager, or the manufacturing manager when the inventory is noted to be low. Also there is an order placed when a customer orders or an assembly worker needs the inventory for use. Neither condition is of value to the company as it adds lost

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