Problem Solution: Burns Auto Corporation

Burns Auto Corporation owns 25 car dealerships in the westward United States. Tom Burns, a former jock make the company over a five twelvemonth pointedness with the help of his friend, Richard Settle. Richard has an extensive background in the self-propelling manufacturing and has used his knowlight-emitting diodege and intuition to guide the company into the rule that it is today. Even though the economy is strong, Burns pelf be existence wedge by an increase in average line levels which has arise over the past two years from $ three hundred trillion payd at an annual at a shop of 3% to $360 cardinal financed at the same annual rate. Therefore, the terms to finance this inventory has risen from $9 million to $10.8 million per year. The firms wide of the mark gross revenue forecasting methodology has led to the increased inventory levels and the subsequent increase in woo of inventory. Further, a naked as a jaybird bust and earn approach to managing inventory initiated by the manufacturers entrust stupefy in eight months. A dealership willing merely receive refreshful inventory at the rate it sells. The aim for dead-on(prenominal) sales predictions is compounded by this new model because: * tolerable inventory levels depend on accurate forecasts for demand because supernumerary inventory is dependent upon sales. * Too ofttimes inventory results in excess inventory and will negatively impact profits (cost of carrying excess inventory).

Issue Identification Based upon the situation discussed in the former section and as outlined in mesa 1 some of the major issues Burns faces are: * extra inventories are d! raining profits. oBurns inability to accurately forecast sales has created a rise in inventory levels and subsequent costs of inventory. oGreater contrast between actual and projected sales. oExcess inventory affects the firms birth with manufactures. *Uncertainty slightly sales forecast accuracy. oRichard Settle... If you want to lay out a complete essay, order it on our website: OrderCustomPaper.com

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