Question #1Assume that you have decided that there are significant weaknesses in the physical...

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Question #1Assume that you have decided that there are significant weaknesses in the physical controls over inventory that would be reduced with a new AIS that supports JIT inventories. Write a memorandum to the CFO describing how this might affect the inventory observation.Remember: Your response will be graded for both technical relevance and writing skills. For writing skills you should demonstrate an ability to develop your ideas, organize them and express them clearly. Your memo should be no more than one page in length.
	
Document Preview: Question #1Assume that you have decided that there are significant weaknesses in the physical controls over inventory that would be reduced with a new AIS that supports JIT inventories. Write a memorandum to the CFO describing how this might affect the inventory observation. Remember: Your response will be graded for both technical relevance and writing skills. For writing skills you should demonstrate an ability to develop your ideas, organize them and express them clearly.  Your memo should be no more than one page in length.To:  Chief Financial OfficerFrom: YouRe:  Inventory Controls

David · Accepted Answer

Memorandum 
To: Chief Financial Officer 
From: 
Date: 18-Mar-13 
Subject: Inventory Controls 
The memorandum outlines the causes and effects of significant weaknesses in physical 
controls over inventory. The Inventory management is highly technical area in the operations of 
supply chain management thereby has a primary impact towards the effectiveness of the logistics 
as well as supply chain systems. Since the cycle of the production as well as consumption that 
never matches in the organization, major goods are required to be kept in the buffer stock for 
getting over this volatility in the demand and supply. Also, the level of higher inventory would 
adversely impact the bottom line of the company. This leads to high risk as well as high impact 
area, which needs to maintain a balance between the two primary goals of the lower cost as well 
as higher level of the customer service.  
Inventory management is an important strategic area within the supply chain operations 
which has a high material impact on the efficiency as well as the effectiveness of the entire 
supply chain systems. For different firms it’s almost impossible towards matching their cycle of 
production as well as consumption, their products as well as goods have to be kept in the buffer 
stock for taking over the unprecedented uncertainties along with variability’s in their demand 
and supply. However, the higher levels of inventory would certainly have an impact on the 
bottom line of the firm. The higher level of inventory is primary and high concern area for the 
organization as it might also have adverse financial impacts on the overall performance of the 
company. Thereby it is highly adamant for the organization to decide regarding the Economic 
Order Quantity point of each of their seasonal business cycle as well as accordingly these 
suppliers needs to be handled based upon these cycles wherein the organization is operating.

Question #1 Assume that you have decided that there are significant weaknesses in the physical controls over inventory that would be reduced with a new AIS that supports JIT inventories. Write a...

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