Wireless World

Inventory Proposal

QUANTITATIVE REASONING FOR BUSINESS - QRB/501

September 26, 2011

Dr. Mohammed Miah

Inventory Proposal

The contents of this paper will include a discussion of the inventory of Wireless World and the problems that it may face by using the chosen inventory method. Additionally, the expected benefits using this method will be examined, data converted based on the time series data that was collected, and analyze the inventory data. Finally, a histogram of the inventory data to forecast the inventory by using time value of money will be displayed.

Description of the Organization

Wireless World is cellular company that carries different brands of headsets for cellular phones. The company uses the first-in-first-out (FIFO) inventory method in which inventory items received into the store first are sold to customers first. The problem that the company may have with this inventory method is the rapid change in technology. Consumers often keep up with technology and want the latest, greatest items on the market. Unfortunately for Wireless World, the first items purchased for inventory may not be what the customers want because by the time the inventory arrives in their locations, new devices may have already been launched. This could result also in inventory that will become a loss or severe discount, as consumers are not willing to purchase outdated devices.

In addition, the release of new technology drives consumer demand and that strongly affects inventory as well. For example, the Apple IPhone and Droid Bionic in year four, month two and month nine, had a big demand in units. With changes in economic conditions, there is a possibility that the demand for the higher end, more expensive technologies will decline. In a case like this, Wireless World may be left with more inventory than the company can move. An efficient way the organization can implement a solution for this problem is to lower the prices for the products to encourage...