Class Activity #12.pdf

INSTITUTO

TECNOLÓGICO Y DE ESTUDIOS SUPERIORES DE MONTERREY

Class Activity No. 12:​ EOQ and JIT Models Operations design and optimization laboratory Prof. Myriam Sanchez

Team José Antonio López

A01372388

Hugo Flores Franco

A01243949

César Vázquez Arzate

A01370849

Due date: Mar/11/2019

1- Write down in a piece of paper the description of how this companies manage their inventories. Pawn Shops have to be careful to manage how many new items they accept as pawns, either too little inventory or too much is bad. A pawnshop might have too little inventory if, for example, it mostly buys jewels and gold that it resells or smelts. In this case, the pawnshop is less interesting to customers, because it is mostly empty. In other case, a pawnshop with a huge inventory has several disadvantages. If the store is crammed with used athletic gear, old stereos, and old tools, the store owner must spend time and money shelving and sorting items, displaying them on different stands or in glass cases, and monitoring customers to prevent shoplifting.

2- What are the critical conditions of their “product/industry” to take into consideration to maintain their inventory? The better option for a pawn shop is a store with a moderate amount of good quality, brand-name items arranged neatly in the display windows attracts passersby, who are more likely to enter and shop. If items are attractively laid out in display cases and shelves, the pawnshop looks more professional and reputable. The pawnshop owner also takes into account their knowledge of supply and demand for the items in question to determine if they think that they will end up selling the items in, for example, $100 to a wholesaler or $250 to a pawnshop customer.

3- What are the higher costs (inventory related) that they must consider? In this type of industry having a high inventory would increase the operation costs, because that means that they aren’t selling their low price items of the inventory and keep them in the storage. By having some expensive stuff in their inventory, that would bring new customers interested in buying them or selling them something similar in value.

4- Could you suggest something different to improve the way they manage their inventories? The pawns maintain their inventories in their stores, that is something that let them have more control over their stock but as they sell different kind of things, they maintain many dead stock. The pawns should avoid dead stock as this kind of stock is difficult to sell. The Pawns could also prioritize through ABC analysis as some products may need more attention than others.

References Campbell, Casandra (2018). ​Warning: You're Losing Money By Not Using These 8 Inventory​.

Retrieved

from

Management

Techniques

https://www.shopify.com/blog/inventory-management​, March 11th, 2019.

"Pawn Shops for the (Formerly) Rich". Wall Street Journal. September 28, 2010. Retrieved March 11, 2019.