Maintaining Parts Inventory of Automobile Repair Shop:

A firm in the automobile service business buy most of its parts supplied from a small number of distributors. Franchised new car-dealers buy the great bulk of their supplies from the auto manufacturer. A dealer's demand for auto parts primarily originates from the general public and other departments of the agency, such like the service department or body shop. For this case, difficulty is to determine the order quantities for the several thousand items carried.

Mostly dealers order their inventory by software and computers packages. For manual and computerized both systems, an ABC classification works well. Costly and high-turnover supplies are counted and ordered frequently; low-cost items are ordered in great quantities at infrequent intervals. The drawback linked with frequent order placement is the extensive amount of time needed to physically put the items on the shelves and log them in.

The computer output provides a useful reference file; identify the cost, item order size and the number of units on hand. The output itself constitutes the purchase order and is sent to the distributor or factory supply house. This easy procedure is attractive because once the forecast weighting is decided; all that ought to be done is to input the number of units of each item on hand. Therefore, negligible computation is involved and very little preparation is required to send the order out.