Improving return on a capital invested by establishing an inventory management system and removing unnecessary investments on tires at E.L. Choa Auto Supply in Diversion Road, Tuguegarao City

Date

5-2012

Degree

Bachelor of Science in Industrial Engineering

College

College of Engineering and Agro-Industrial Technology (CEAT)

Adviser/Committee Chair

Clarissa M. Pesigan

Abstract

The study was conducted at a store of E.L. Choa Auto Supply. According to the managers,they are not satisfied with the return on capital invested of the store. Based from the gathered data on sales, tires are the main contributor to the investments. It was observed that inventory level of tires was very high. The study aims to improve ROR by establishing an inventory management system and removing unnecessary investments on tires. ROR of each type of tires were computed to evaluate its profitability. The root causes of low ROR of tires were determined using thew Ishikawa diagram. CNX analysis was applied in order to get the controllable and experimental factors, to which solutions and alternatives were based upon. The resulting experimental factors suggested the use of a forecasting method, establishment of an inventory system, and evaluation of the profitability of investments. the factor-rating method was used to select the best alternative with consideration to the net annual profit, net capital investment, and the overall ROR. The best alternative involved the implementation of a forecasting method, establishment of an inventory system, and the removal of tires from the product line with ROR below MASRR. This resulted to the increase of ROR and net annual profit, and a reduction of the capital investment needed on tires.

Language

English

Location

UPLB College of Engineering and Agro-Industrial Technology (CEAT)

Call Number

LG 993 2012 E66 L37

Document Type

Thesis

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