Reference no: EM131144469

Fantasy Boutique is a medium-sized clothing store that produces and sells stylish batik clothing and other traditional clothes. The owner of the boutique, Faiz, had appointed you as a consultant in developing a just-in-time (JIT) inventory system. He plans to evaluate the system after one year. You must bear in mind that the inventory is the most vital asset to the clothing store since it may influence in measuring growth or reduction, managing costs, or improving the customer shopping experience. You had conducted a research and found that there is a significant amount of shrinkage, and there is a high cost related to inventory storage facilities. Research indicates that inventories use almost half of the company’s cash flow. Finding also confirms that majority of the company’s employees are trained to do only one job whereby significant changes will result in the loss of union employees' jobs. Your research also shows that company should continue to produce the major production item to have a strong sales growth. You are required to: Write a suggestion report using above information and other relevant points concerning the development of JIT inventory system. Should the firm use the JIT inventory system? Relate your discussion with the performance measures use to assess the effectiveness of the system, cost associated with inventory, the important of controlling turnover and the impact of inventory management on profitability. Compare and contrast your decision with other inventory systems. Please support your arguments with relevant and valid sources from academic journal articles.