ANOVA Paper - Inventory Accuracy of Team C's Manufacturing Department

Essay by rooster25University, Bachelor's January 2007

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The business problem Team C will be analyzing revolves around the inventory accuracy of Team C's manufacturing department. Inventory is a very important subject when a company is publicly owned. It is imperative that a company keeps excellent records of their inventory for investment purposes. Most investors consider inventory the same as money because in essence, it took money to either purchase said inventory or create inventory. Having inaccurate inventory reporting is a very serious crime whether it is done on purpose or not. History has shown that it can lead to very stiff punishment.

Historically teams C's manufacturing department has not made inventory accuracy a priority. It was not until 2005 that the department created a cycle count team to track inventory accuracy, and eliminate an end of the year wall-to-wall inventory. The first year of cycle counts was accompanied by a goal of ninety percent overall inventory accuracy for the department.

The manufacturing department was able to reach this goal but, throughout the year it was realized that the ninety percent goal was not an acceptable goal for inventory accuracy. So a plan for adding percentage to the goal every year was design to ensure continuous improvement when it come to inventory accuracy. The cycle count accuracy goal for 2006 was stated at ninety-two percent overall accuracy.

As the year of 2006 progressed it was realized that the department because of multiple factors, the department would be very close to failing to reach their goal of ninety-two percent cycle count accuracy. With there being multiple processes in the manufacturing department the three teams in the department had three different ways of transacting their inventory. The question arose whether their one or more teams was holding the department down or if the average cycle count accuracy was the same...