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Toyota Inventory Management Decision - Term Paper Example

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The paper focuses on Toyota Motor Corporation which is a Japanese automobile manufacturing company. Toyota is one of the most successful companies in the world in terms of revenue, management efficiency and product quality. The company is also referred to as one of the pioneers…
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Toyota Inventory Management Decision
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Download file to see previous pages The values and functioning methods of Toyota are known as the “Toyota Way”. Employees of the organization are encouraged to respect each other and strive for continuous improvements. Toyota was selected for conducting the current analysis as the company operates in the U.A.E. Toyota UAE has been successful at implementing a strong customer base in the U.A.E. The company has been successfully holding its core corporate values in the Middle-East while catering to the specific needs of the consumers. Toyota U.A.E plays an important role in the automobile industry of the nation, contributing significantly in terms of revenues and productions. The values and mission of the company are described as follows:
Inventory management is one of the most critical decisions which managers are required to take. The success of an organization depends upon a proper inventory management process. Inventory management involves establishing proper control over the flow of stock of goods into and out of the business. The process involves taking critical decisions regarding the level of stock to be brought to the factory floor, the level of stock required to be dispatched, the time interval for placing orders for raw materials and the duration of storage. Factors such as the duration of storage of inventory and the quantity of materials orders affect the cost of production. Hence firms are required to take inventory-related decisions through careful planning and long term analysis. Warehousing, cost, delivery time and turnover time are the most important aspects which mangers consider before making decisions relating to the management of inventory (Stevenson and Hojati 96).
Toyota essentially follows the just-in-time inventory management concept. Based upon the just-in-time inventory concept, raw materials are brought to the factory floor only after an order for the same has been received from the dealers and customers. The just-in-time inventory concept ensures that there are no wastages of valuable raw materials and all units manufactured. ...Download file to see next pagesRead More
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