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Contemporary Logistics Recommendations

   

Added on  2019-09-26

5 Pages937 Words395 Views
Running head- Contemporary Logistics Contemporary Logistics

1Contemporary LogisticsRecommendations to Reduce Inventory LevelManagement of inventory level is very important for the businesses. There are several ways to reduce the inventory level in order to avoid the cost and be profitable. The level of inventory can be reduced if the supplier lead-time will reduce (Viloria and Robavo, 2016). Faster supplier lead-time helps in reducing the short-term carrying cost of the inventory as well as avoiding long-termrisk of holding the product. Inventory level can also be reduced by eliminating obsolete inventory. Obsolete inventory can be reduced by selling out the product at a lower price. Optimizing order size as well as centralizing inventory control also helps in reducing the inventory level. In case of Johnson, the level of inventory should be reduced by eliminating the obsolete inventory. The product should be sold out at a lower price to avoid the holding cost of warehouse and many others (Viloria and Robavo, 2016). The impact of eliminating obsolete inventory by selling at a lower price would be a positive impact in long-term.JITJIT is a very effective strategy for the businesses involves in manufacturing. There are several advantages of JIT such as less time required, reduction of waste, and smaller investments. JIT also helps in reducing the level of inventory due to the high rate of inventory turnover (Thomopoulos, 2016). The production can easily halt due to the short production runs. JIT also have some disadvantages such as there is lack of control over the time frame, more planning needed. There is also the risk of running out of stock (Thomopoulos, 2016). The JIT system would be the best system for the company because the company is already suffering from obsolete inventory level and wanting to change the strategy to reduce the

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