Patric profilja

Parts Emporium Case Solution 

The executives can be convinced only if the proposed inventory system provides a significant cost reduction; hence, it is vital to show the proposed working regarding cost reduction which makes it viable for the company. 

The three major problems that Parts Emporium is facing includes:

The utilization of the warehouse capacity increased from 65 to 90 percent indicating higher inventory holding costs along with stagnant sales growth.

Customer orders are often not met due to the inadequacy of firm's customer service and hence, Parts Emporium backorders such orders which are not fulfilled through stock. This results in a loss of about 12 percent of demand due to the presence of other competitive distributors.

Furthermore, no such aggregate information regarding the inventory is available, and the company does a physical count of the inventory at the end of a week.