magi corporation
MAGI CORPORATION deals in maintenance of agricultural tractors and spare parts supply. It has a central store in Bangalore and eight branches in Karnataka. Jayadev was appointed manager and emphasized the need for scientific inventory management and forecasting techniques as the old methods were rule-of-thumb. Mohan, an MBA engineer, was hired to suggest improvements. He recommended procedural changes to streamline paperwork and hiring sales engineers. Mohan also suggested implementing inventory control using reorder levels and fixed interval reordering instead of fixed quantities. Finally, he determined that computerization would increase costs initially but could lead to long term business growth and inventory savings outweighing computerization expenses over time.
magi corporation
- 1. MAGI CORPORATION Introduction 1.Deals in maintenance of agricultural tractors and supply of spare parts. 2.Central store at Bangalore and eight branches in Karnataka. 3.Maintains inventories of stock for indigenous and imported spare parts of tractors. 4.Jayadev was appointed as manger . 5.Old and rule of thumb method of inventory management. 6.Made emphasis on urgent need of scientific management of inventory control and techniques for forecasting.
- 2. Operating system of magi corporation Indian suppliers Foreign suppliers Other states Central stores Branch 1 Branch 2 customers customers customers customers
- 3. Existing system At each branch there is one helper and one sales assistant. Otherwise Numbers is two. paper work flow - incase of shortage of items, the shopkeeper make order with the purchase section and the department prepares 5 copies. Incase of receiving order 3 copies of the stock are prepared.
- 4. Inventory control procedures Mohan an engineer with MBA was appointed by jayadev. To suggest new inventory control procedures to cut cost. To suggest whether the use of computerization is feasible. Mohan recommendations on three areas:- 1. procedural improvements, 2. inventory control and 3. Forecasting and computerization.
- 5. Mohan recommended Stricter control of operations to be accomplished , he also proposed organisation structure, he felt sales engineer and engineers in all branches are required for better control. Reduced clerical work 1. copies of purchase order. 2. copies of delivery note. 3. Copies of Cash bill
- 6. Inventory control Recommended that System that work on scientific principles i.e. reorder levels, maximum stock and minimum stock levels. Mohan suggested fixed interval reorder period. Instead of fixed quantity reorder system.
- 7. Recommendations for computerization. The induction of computerization would led to increase in cost in long run but when the system stabilizes in long run can led to increased business and the saving in inventory cost and will overcome the computerization cost.