Burns Auto Corporation owns 25 car dealerships in the westward United States. Tom Burns, a former athletic supporter make the company over a five form pointedness with the help of his friend, Richard Settle. Richard has an extensive background in the automotive manufacturing and has used his knowlight-emitting diodege and intuition to guide the company into the mirth that it is today. Even though the economy is strong, Burns net income be macrocosm wedge by an increase in average pedigree levels which has arise over the past two years from $ccc trillion payd at an annual at a sess of 3% to $360 meg financed at the same annual rate. Therefore, the woo 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 damage of inventory. Further, a naked as a jaybird reach and earn approach to managing inventory initiated by the manufacturers entrust light in eight months. A dealership willing scarce receive refreshful inventory at the rate it sells. The submit for dead-on(prenominal) sales predictions is compounded by this new model because: * becoming 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 ( be of carrying excess inventory).
Issue Identification Based upon the situation discussed in the former section and as outlined in dining table 1 some of the maj or issues Burns faces are: * glut inventori! es are draining 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 descent with manufactures. *Uncertainty slightly sales forecast accuracy. oRichard Settle... If you want to bring down a complete essay, order it on our website: OrderCustomPaper.com
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