Inventory Proposal Essay

1329 words - 6 pages

Inventory Proposal



August 22, 2012

Inventory Proposal

In reviewing the Summer Historical Inventory Data (SHID) Team A has determined that not enough information is provided to make sound business decision. Using poor information to make decision can hinder an organization further than its current problems. SHID shows highs over the summer months. Team A had identified that crude oil companies experence similar spike in sales. Certain times of the year the usage of crude oil experiences highs, summer month because of travel. By examining the SHID and adding some needed variables, Team A will be able to make the sound decision that the organization ...view middle of the document...

So, we started breaking down the information into small segments to get a better grasp of the company’s sales performance over time. The simple chart listed as Figure 2 represents the total demand in sales over a four year period.
| | | |
|4 Year Totals | |
|Year |Total | |
|1 |457350 | |
|2 |487030 | |
|3 |537620 | |
|4 |550750 | |

Figure 2
With this chart we can see there is an increase in sales each year. Understanding this is helpful because it begins to shed light on the company’s true performance.
Monthly Break Down
The SHID displays data in months over period four years. This information is used to determine the company’s busy and slow months of the years. However, the data presented is in a format difficult to simply view and understand. (Refer to Figure 1) Once the data is placed on an Excel sheet and broken down for each year, we can see the strong and weak months. Below is listing of each year using scatter shot on Microsoft Excel.
Year 1

Year 2
Year 3

Year 4
You can see for the year’s one, three, and four the strongest months are May, June, July and August. The second year was steady year, with the month of August being the best month. The second year was better than the first year. Year 2’s average sales were $40,586.00 which was slightly higher than the first year with an average of $38,113.00. But there were no high sales over consecutive months. There is no method for determining why the 2nd year did not follow the same trend as the other years. Despite the second year being somewhat off, the trend for all years shows strong sales early and slowly tapering off towards the end of the year.
To show the probability of data in SHID Team A has chosen to incorporate a histogram, Figure 3. “Histograms illustrate the process distribution and are used to make predictions about a stable process. If the system is unstable, the histogram will have little predictive value” (PQ systems, 2012). Understanding the trending information of what Team A is predicting for the future value of our organization, we can evaluate a series of numbers for accuracy. Constructing the bars in this histogram is a way to evaluate a series of quantitative information other than probabilities. Team A is trying to show the frequency of occurrence in our data so we decided to use this graph to illustrate our statistical...

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