Literature Review On Inventory Control Management Finance Essay

Literature Review On Inventory Control Management Finance Essay The Assam Tea Corporation is a pioneer in producing high quality tea having its own processing plant with an excellent implication of inventory control. The main aim of this report is to conduct a literature review on the inventory control management and the operations in practice of the Assam Tea corporation processing plant where I was employed. The company has an efficient structure of inventory control and has set a standard for other companies in the same operation in that area .The company produces a high quality tea mostly meant for export in the form of CTC and Orthodox tea. The product of the company is world famous for its high quality taste. They offer state of the art infrastructure in the processing plant with a highly trained employee and efficient way if inventory control. They have various units in the processing plant i.e, starting from the picking up of green leaves which is the major part of raw material.The company has own plantation unit from where the raw material is readily available. Moreover they have tie ups with other local tea gardens to ensure a steady supply of tea leaves.The tea processing unit is a complex mechanical process works under the principle of operation management and inventory control.The function of it is a crucial one which has to deal with seasonal and cyclical fluctuations of demand persisting in the market .The inventory control has to deal with waste management in the unit by finding out the optimum level of demand .The seasonal fluctuations is mainly incorporated with the monsoon season where the production of tea leaves at the peak level.I was assigned with the responsibility of th e assistant manager operations in the processing unit. This report mainly encounters with the various concept of inventory control and its management undertaken by an organisation with stress on inventory and its effective control.It deals with the cost related with the inventory and its profile,Usage of probabilistic estimate of demand and overall role of the inventory control in a tea processing unit .There are various issues how to improvise the situations and improve the competitiveness related to the issues .The method applied to prepare this report with a high concentration on the textbooks and the web-source related to operations management .The information collected through all the experimentations observed and finally resorted to website and standard textbook of operations management. 2.Literature Review 2.1 What is inventory Inventory has a multilevel function in the process unit and the firms used to maintain mainly four level of inventories Raw material-This is the unprocessed form of the item which can be utilisied from varied number of suppliers .This form should be used to find out the superior form by removing the supply variability in quality,quanity or time of delivery. Work-in process(WIP) inventory-This is an intermediary form of inventory when the raw materials undergone a change but not completed. Maintanence/repair /operations(MRO) inventory- 2.2 INVENTORY CONTROL MANAGEMENT In this part of analysis importance should be given when to order and how much to order.The model which are based on independent demand can be divided into three. 1.Basic Economic Order quantity(EOQ) model 2.Production order quantity 3.The quantity discount model Basic Economic Order Quantity model This is the most common form of the inventory control technique .The technique is based upon following assumptions- Production order quantity model The model is applicable under two situations.Firstly,When the order is placed there is continuous flow of inventory.Secondly,the units are produced and sold simultaneously.In the case of Assam Tea Corporation processing unit both these situations are prevalent.In this model daily production rate is determined on the basis of daily rate of demand. It is useful when inventory build up is a continuous process over the time and assumption of traditional Economic Order conditions holds valid.It is the situation where the optimum order size Q* is estimated with an equality in set up cost to holding cost,The production order quantity model: Q=Number of pieces per order H=Holding cost per unit per year P=Daily production rate d=Daily demand rate or usage rate t=Length of the production run in days The final expression for optimal level of inventory Q* is- Probabilistic model with constant lead time Probailistic model with constant leadtime is highly relevant.In the presence of uncertain demand ,the management of the company faces challenges to maintain adequate service level.The service level can be complimented by the probability of a stock out isà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦To reduce stock out the company can hold inventory as safety stock. Whereas if Reorder point=ROP=dxL With the addition of safety stock,the expression becomes=ROP=dxL+SS However annual stock out costs=The sum of the unit shortxthe probabilityxThe stock out cost per unitxthe number of orders per year 2.2 COST OF INVENTORY In case inventory control analysis there are various costs involved in the overall process.The cost of inventory is calculated in the form of unit values.However major segment of the inventory cost can be discussed as follows- THE CARRYING COST OF INVENTORY In this segment of costs of carrying items of inventories are included.This is the cost of running a warehouse,cost that are incurred on handling and counting,costs involved in special storage ,damage and lost,insurance,tax and wornout costs. THE ORDERING OR SET UP COST This is the cost which is associated with placing an order and replenishment.This cost includes all the form of orders,establishment cost needed to ensure it,inspection and receiving cost,handling the vendor invoice and the cost necessary to meet unexpected situation. This may be a cost of skilled mechanic charged as per his technical specification.There are various arguments whether the cost of the skilled mechanic is a fixed cost .But Kaplan (1988),all the costs involved in the long term is virtually variable cost where in that period a person can be fired,a plant can come to shutdown. INSUFFICIENT CAPACITY COST The cost involved here is meant to avoid the stockout cost.In the case of production process ,it is the emergency cost needed for emergency replacement of the production equipment to enhance the output level,cost involved to speed up the process,rescheduling and assigned work in split up version. SYSTEM CONTROL COSTS This is the type of cost appeared in the operation process as per selection of decision system.This includes acquisition,storage,maintanence and computation of the data.The treaining instituted by the organization and employee verification is also falls in the category costs. In Assam Tea Corporation ,there are a number of costs involved in different level of operation processes .The green leaves are initially plucked from the plantation unit and allowed to undergo different processes like picking ,wilting ,bruishing ,oxidation/fermentation ,firing,yellowing,shaping,drying and curing to get the final product. In the processing unit ,one of the major cost incurred by the company is warehousing the tea product as well as the green leaves.If the fresh leaves are not stored properly there is a greater possibility of being dried up and becomes waste.The insurance cover and tax are also one of the component. The cost of placing an order is one of the significant part of the processing unit.There is an inspection unit in the company which takes account of quality control in the unit.There is the cost of technicians expertise in that specific line During the peak season as the production process is a complex mechanical one.During the peak season ,especially during monsoon,there is always extra cost of utilizing extra-capacity,expediate the process.In that situation temporary workers are employed on the basis of shift duty with overtime bonus has to be paid. The company has to bear the cost on information system and its maintanence as it uses a data warehousing software.With the present environment of rapid change in the technology the company has to provide training for skill enhancement training to its manpower.This has been done with Tocklai Tea Research Centre,one of the leading Tea research institute .The training cost and performance analysis cost is formed as one of the cost. KEY VARIABLES IN INVENTORY MANAGEMENT 1.REPLENISHMENT LEAD TIME It is the time between placing an order and to meet the final demand of the customer physically. 2.REORDER POINT It is the point of the inventory level where the replenishment of stocked item takes place. Where ROP=dxL where d is the demand per day,L is the leadtime for a new order in days 3.SAFETY STOCK A buffer stock to meet up an uneven demand. OPERATION PROCESS UNIT OF TEA The Assam Tea Corporation has its processing unit for production of CTC() and Orthodox tea in the form of à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.which account for almost 80% of the main production whereas the other form of teas are produced at paltry 20%. The tea processing begins with flushing of tea from Camellia Sinensis(Botanical name of tea) and after that it is dried for brewing of tea,oxidization of leaves and ,stopping oxidization ,drying of leaves ,and oxidation has a main part to bring the final flavor of tea. The company produces variety of tea through different processes which can be visualised with the aid of flow-chart diagram. The process itself starts from the left hand side of the flow chart with the operation of stocking into raw material or fresh green leaves.The processing unit of the Assam Tea Corporation is highly engaged in production of black tea and green tea which constitutes 80% of the output whereas other constitutes 20% of the total production. For obtaining a black tea(the red coloured flow chart) as the final product it can be seen in the diagram that after getting the fresh leaves the process undergoes with indoor witting,the CTC with full oxidation rolled to the drying unit done through desiccation and finally drying at optimum temperature,the black tea can be obtained. While for green teaTthe green coloured flow chart) after steaming and panning it is rolled to get the desirable form and finally dried to get green tea.The whole system of operation can be divided into following important parts- 1.Picking A terminal bud and two leaves are plucked from Camelia Sinensis. 2.Wilting With an oxidation done in the presence of enzyme ,the tea leaves are wilted to remove the excess water from leaves. 3.Brushing To expediate oxidation ,the tea leaves are let to fall in buckets and rolled over by wheels. 4.Oxidation/Fermentation The major operation of oxidation was to break down the the chlorophil and relax the tannin,as the leaves are kept in a climate control room. 5.Kill green/Firing To stop the oxidation at desired level and restore the flavor this step is done. 6.Yellowing It is done in a close container after firing to obtain beverage of yellow tea. 7.Shaping After yellowing it is rolled into stripe wrinkles 8.Drying This is done to get the ultimate product or tea for sale. PROBLEMS RELATED WITH INVENTORY CONTROL IN TEA PROCESSING UNIT In the tea business it is the monsoon which has a direct effect on the production of the green tea leaves which is the main raw material for the processing .In case ,there is good rainfall the yield of the leaves goes up and supply becomes steady.In that season the production unit of the tea garden is at greater stress with low lead time which means shorter time gap in the production system to wait,move,que and set-up and run time for each component produced.On the contrary,if there is low rainfall,the production of green leaves drops and lead time is more as the supply flow is less. However ,risk factor is present during the time of high production ,the tea leaves needs extra care so that it should not expose to moisture and in that case extra manpower is needed on shift duty basis to expedite the process.In the Assam Tea Corporation processing unit ,the production and sales takes place within a day.In this situation production order quabtity model is relevant as the firm is receiving its raw material over a period of time within a day which directly comes from the plucking unit.An optimum level of Q* is calculated to control the inventory. Recommendations In the view of the above discussion an optimum level of inventory can be obtained by reducing the waste in the following steps. 1.Inventory Planning An ideal inventory planning can take place with the arrival of new one immediately after the last unit sold/dispatched. 2.Establish order cycles In case of business with seasonal cycles it is important to establish a relationship of demand between sellers and suppliers. 3.Balance Inventory level Inventory level should be balanced looking into the matters related to market and budget. 4.Review Stocks The stocks should be reviewed as the obsolete one is equivalent to a dead capital. 5.Follow up of stocks The management should take the key decision about disposal,replacement and discontinuance of different inventory base. INVENTORY PLANNING DECISION IN TABULAR FORMAT COST AND OTHER IMPORTANT FACTORS SERVICE REQUIREMENT CUSTOMER ORDERING CHARACTERISTICS In this category ,the most important part is customer expectations and competitive practices,time management and influence on customer. Order characteristics include order timing and size,information about large orders on the basis of standing orders. In the tea processing unit ,the customer always is in prompt mode as the order has to reach the market and meet the price fluctuation in the auction market. DEMAND PATTERNS SUPPLY SITUATION Demand pattern is always governed by variability and seasonality.Another important part is presence of substitutes and ability to forecast. The green tea leaves as an inventory effected by variability of the weather condition and effected by rainfall which determines yield of the tea leaves and it is the three quarter of the month the supply is streamlined and one quarter is without any production.The presence of substitute is low and as there is high fluctuation in the market forecasting is not an easy task. This a challenging part as to narrow down the lead time , the processing unit has to avoid any waste .At the same time reliability depends upon the flow of the inventory and at the same flexibility can be ensured with additional work force on call which can also expidiate the process. COST FACTOR NATURE OF THE PRODUCT Again the cost factor is governed by stock out cost which is also a probabilistic measure,there is also cost of carrying and space The nature of the product is perishable and moisture will make it obsolete OTHER ISSUES In the tea processing unit the crucial point is power supply and mechanical efficiency.

My Dad and the Flat Earth :: Personal Narrative Profile

My Dad and the Flat Earth Today my father tells us the earth is flat. He sits us down, the five of us, sits us down on the couch in the living room and tells us the earth is flat. It's not like he says, "Boys. The earth is flat," and then walks away. It's not like that at all. What he does is he takes the time to explain it to us. Even gives us visual aids. His hands become the earth. With his hands out before us he shows us the exact shape of the earth. It's not flat, really, but saucer shaped. Almost bowl shaped. He shows us with his hands. His fingers bend up slightly and his thumbs bend in towards each other, so that his hands make a kind of bowl. "Where do we live?" my oldest brother Sam asks. "Here," says my father. "in the bowl." "Really?" "Yeah," he says, with total confidence. "Look." He starts pulling his slightly cupped hands upward towards the ceiling, slowly. He doesn't say anything as he performs this move. He wants us to watch it for a while. He doesn't look at his hands, he looks at us. Our reaction. We don't react. "This is how the earth moves," he says. "it travels constantly upwards." "Upward?" says Len, my other older brother. "Yes. Upward." "Towards what?" It's me asking this time. I figure it's my turn to speak. My father looks at me for a moment and I think he's angry. I'm sorry I asked the question. Then this weird smile comes across his face and I'm not sorry anymore. Now I'm nervous. About my father. The thought occurs to me that my father has lost his mind and that this strange half-smile is the half-smile of a madman. "That's a very good question, Rand." "It is?" "A very good question. It shows you're using your mind." "Losing my mind? Why?" "Using," she says. "Oh. Using." "The earth travels upwards but it's not important where." "It isn't?" I was confused. He had just said that it was a good question, now he seemed to be saying it wasn't. "No," he answers. "What is important is what the earth moves in relation to.

Outliers Essay

In the book Outliers author Malcolm Greenwell talks about a variety of topics that deal with how success is obtained by individuals who are blessed to have many different opportunities. They range from a school designed for students to excel, to being financially wealthy, or even being in the right place at the right time. Many different types of examples of people who found success through opportunities laid out in front of them are discussed in Outliers. From a man who was Jewish and just happened to be born in a location where lawyers were scarce, to hockey players who were born just after the cut off dates, Gladwell describes types of advantages and how these opportunities sparked success for these people. He also talks about how success is also derived from hard work and putting in the time to master a particular trade or skill. A theory of putting in ten thousand hours is discussed as the way to become an expert. This way of thinking is actually a very intelligent one due to the fact that to achieve greatness at the highest level it only makes sense that one would have to work the hardest. As Gladwell states, â€Å"The people at the top don’t work just harder or even much harder than everyone else. They work much, much harder† (Gladwell 39). This is a great statement that shows how while luck and good fortune is never a bad thing, hard work and taking advantage of opportunities is what separates the ordinary from the extraordinary. While outworking the competition is a very important aspect, having and taking advantage of opportunities is just as important to achieving success. Today, people all around the world pay attention to many famous stars or athletes and are always inspired by stories of struggle or hardship that they may have dealt with. Josh Hamilton, a famous baseball player, is one of these examples. His story is one that has been heard by many that deals with a guy who had everything he needed in life and threw it all away when he fell into the proverbial grasp of alcohol and drugs. Then when all hope seemed lost he was able to escape the adversity in his life and turn it around and become the clean, Christian man that he is today. Josh Hamilton’s struggles and self-imposed obstacles played a major part in the early years of his major league career. He fought through and became a very successful player through the opportunities that he had and was given on his way back to the top. Josh Hamilton was a multi-talented person from the time he was very young. He could hit and throw harder than anyone his age and had all the skills that a coach would look for in a young child. At the age of eight he could out play most of the kids in the thirteen year old league. He was what most would call a protege. Many of the parents were scared with Josh’s ability and raised concern about Josh hurting their children who were not nearly as talented. He amazed anybody who watched him and he even talked about people being stunned after watching him take a round of batting practice. He states, â€Å"I enjoyed watching other players’ reactions when I took batting practice. Everyone was stunned of how hard the ball came off of my bat† (Hamilton, 181). He had a true talent that was unlike any that most had ever seen from a kid that age which was a God-given gift without a doubt. Throughout his teenage years he worked his butt off to be the best he could be by hitting and throwing just about every day, as well as lifting and staying in shape. Hamilton had everything to be a superstar, he just needed to keep his head straight and he was destined to become a millionaire straight out of high school if all went well. Hamilton grew up in an excellent household with two parents who loved him deeply and ones that supported everything he wanted to do. They did well financially and he received several opportunities to excel due to this financial stability. From all-star teams to personal coaches, Josh had it all laid out in front of him. He had a desire to be the best unmatched by most kids his age. He had a unique understanding of what it takes to be â€Å"big-time† that few adults every completely grasp. He talked to many pro scouts during his early years of high school and he was preparing to be drafted and continue his fast track to fame. Everything that Gladwell describes as keys to success Hamilton was provided. The only thing to keep him from this would end up being himself. Josh was drafted in the 1999 draft as the number one overall pick by the Tampa Bay Devil Rays and signed a $3. 96 million dollar bonus straight out of high school (Hamilton, 187). He was playing ball and doing extremely well. He had his family support and was growing into quite the individual. Eventually, however, when a few incidents were placed upon him, he folded and turned to a terrible place to find happiness. He did things he never thought of doing before from drinking to smoking weed and eventually becoming a major crack addict. He got in with the wrong crowd and could not get out of the hold it had on him and was on his way to ruining everything. He spent all his money on drugs and alcohol and was very close to killing himself from the drugs he was taking. He had a family at the time and he distanced himself from them to a point where his wife wanted nothing to do with him. Life was falling apart for the once nationally renowned phenomena. It wasn’t until he was pushed to the brink that he began trying to get to rehab and fix his addictions. He talks about his problems regarding the extent of his issues in his book, Beyond Belief. He says, â€Å"My journey to the depths of human depravity- to a place where a single-minded desire to alter my consciousness was my only goal- defies logic† (Hamilton, 187). This helps bring his story full-circle to show how he went from such a high point to a low, and then back up again. It is a true story of opportunity and fight which Gladwell talks about in his book. Hamilton’s struggles fit in well with Gladwell’s success theories because Gladwell talks about how opportunity leads to success and Hamilton had every opportunity to excel. He was provided everything he needed and he obtained everything until he messed it up with bad decisions. He had many people help him as he worked back and thanks to these people he was able to make it, from the rehab people, to his teammates, to the baseball organization, and especially from his parents. This follows suit with Gladwell’s point of how opportunities can lead to success when all hope seems lost. When Hamilton came back he was better than ever. Surprisingly he was away from the game for over two years, but when he returned he had not lost anything. His swing was still solid and his arm was still what it always was. He was a much better person and he was blessed for his chance to come back. He found the Lord and ended all his struggles by putting his focus in much more important things such as family, faith, and ball. He now has exceled to become the league Most Valuable Player in 2010 and has lead the Texas Rangers to two consecutive World Series appearances. The writer of the Josh Hamilton biography talks about his physical attributes, especially his hitting ability when he says, â€Å"Josh has one of baseball’s most magnificent swings. It is smooth and powerful. His knowledge of the strike zone helps make him a great hitter, and he can clear any fence in the majors. In other words, he is a pitchers worst nightmare† (JockBio). Society can learn many things from Josh Hamilton’s story. It can learn that even with hard work and all the things that Hamilton had going for him, messing up and ruining it can happen. But through anything if a person has opportunities to come back, they can succeed. Malcolm Gladwell has many examples of how success can be obtained through opportunity and hard work and Josh Hamilton is an excellent example of this. He struggled and was in a terrible situation but with an excellent supporting staff behind him, he was able to come back better than ever and do things that everyone thought he could do in the first place. Josh Hamilton is a true testament to success and a great figure to look up to.

Life of Vlad the Impaler - Free Essay Example

Sample details Pages: 1 Words: 329 Downloads: 1 Date added: 2017/09/20 Category History Essay Type Narrative essay Tags: Army Essay Did you like this example? 1431- Vlad Dracula is born –father Vlad Dracul (Vlad the dragon) real mother Cneajna 1435- Vlads younger brother Radu the Handsome 1436-Vlad becomes Voivode (Prince) of Wallachia 1442-Vlad Dracul and his sons Radu and Vlad Dracula visit Gallipoli to pay tribute to the Ottoman Sultan Murad. And seize them and Vlads older brother Mircea rules in his father’s absence. 1444- Vlad Dracul participates in an anti Turk crusade with John Hunyadi, the Hungarian and the sultan allows Vlad and Radu to live 447-Hunyadi forms an alliance with Vladislav 2nd (the Draculs enemies) Mircea is tortured and buried alive and Vlad Dracul is killed attempting to escape his capital city 1448-Murad releases Dracula and gives him the support he needs to rule Wallachia and rules for 2 months but then is forced to flee 1451-Sultan Murad dies and succeeded by Muhmed 1453- Mehmeds forces attack Constantinople bringing the Byzantine Empire to an end 1456- Hunyadi allows Dracula to come out of exile as his vassal. Fearing the sultan will attack Hungary next. By August 22 Dracula is again Prince of Wallachia. 1457-Dracula seized all the nobles who help in the death of his father and brother. He forced the strong to build castle Dracula, the weak he impaled his favorite method of torture giving him the name Vlad Tepes (Vlad the impaler). 14759- In his best known action Dracula sets up a table near the base of Timpu Hill and dines as he watches thousands of people impaled (tortured to death). He is said to have dipped his bread in the blood of his victims 1462- Sultan Mehmed and Radu the Handsome invade Wallachia with an army three times the size of Draculas. On June 17 Vlad leads a raid that almost succeeds in killing the Sultan but when the sultan’s men chased Vlads raid they run into a psychological warfare surprise. Dracula has set up a forest of stakes on which he has impaled 20,000 prisoners. 1475- Radu dies of syphilis. Don’t waste time! Our writers will create an original "Life of Vlad the Impaler" essay for you Create order