One of my last assignments for the fall semester. I would like to get some help with the questions at the end of the Case study.
lamb___s_automotive_supplies.docx
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Lamb’s Automotive Supplies*
Molly Lamb has been a car aficionado since she was a teenager. This passion led her to open an
automotive supply store. Her primary customers are small car repair shops. Many of these shops service
a variety of makes and models. The other customer base is car buffs such as herself. These customers
are car hobbyists and they own “classic” cars. They often buy an older clunker and rebuild it. They prefer
to rebuild it as much as they can to the original specifications. Consequently, finding parts for these
older makes/models is a challenge and building an inventory is even more difficult.
Because Molly is such an old car enthusiast, she has often scoured the Internet, junk yards, and other
places for usable old car parts. Molly has a section of her warehouse set aside for “classic” car parts,
from starters, to hub caps, to door handles, etc. There is no real competitor in this segment of her
business. While a few places may have the odd part or two for older models, Molly has a significant
inventory for most makes and models going back to the 1940s. Because of the generation of the
customers she is serving, the newest make/model is from the early 1970s.
The remainder of Lamb’s Automotive Supplies’ inventory is for more recent makes and models, those
built within the last ten years. This section of the inventory is much larger than the one for the “classic”
cars; however, despite its size, its dollar value isn’t much higher. One challenge Molly has is warehouse
space. Inventory capacity is basi- cally directly related to space. Therefore, in order to serve both
customer segments as best she can, Molly must maximize her warehouse space.
Although Molly is aware of what inventory she has on hand, she has never actually used a specific
inventory system. Now that her warehouse is reaching capacity, Molly realizes she must have a better
inventory management process. Adding more warehouse space isn’t an option. She must use the space
she has more efficiently. Molly begins to ponder how she can do this without creating a potential
inventory shortage for either customer segment.
Discussion Questions
1. Since the parts for the “classic” cars are difficult to obtain, Molly has decided that she must set aside a
certain percentage of the warehouse for these parts. When she locates a specific part for this customer
segment, Molly has to buy it and place it in her inventory because once the opportunity passes, it may
never return. How does this affect the inventory management of the parts for newer cars? What
systems or processes do you recommend to Molly to ensure she does not develop shortages for the
parts for the car repair shops? Explain how your recommendation helps Molly.
2. Considering Molly’s situation and her two distinct customer bases, do you think the ABC classification
system would benefit her? If so or if not, explain why.
3. Explain whether the EOQ or statistical reorder point methods can enable Molly to better manage her
“classic” car parts inventory.
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