Business Case Study: Steve's Tire And Lube '

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In this case, We have found Steve’s Tire and Lube’s company to have strong competitive priorities with their friendly environment, honest an reliable work, good reputation in the small town, quality service are worth the price, variety of services and supplies at retail, good employee training at vocation school, and most importantly they have loyal and hard workers, thus store turnover is rare. The order qualifier is service variety, including good services about oil changes, tire rotation and balance, brake pad replacement, and service inspection. In addition, provide retail parts and supplies are also considerable for the customer. Comparison with the same type of store, Steve’s has good order winner than others. It is about offering high…show more content…
For the other part and supplies, the highest safety stock level is 80.85, which is the high performance motor oil. For other products, they are not as high as the motor oil and their safety stock level is fall between 1.82 and 17.99. The arrangement of the stock level is appropriate since the delivery time for the protective covering is one week while the sale and demand for the covers are high. So it is reasonable to have a high stock level. Since the service level is very high (95%), we recommend that the safety level for seat cover can be higher. We can find out that by using the continuous review system the total annual cost of ordering and holding inventory is $6646.57. Also, we find that the holding cost is 30% of the unit cost and the transportation cost for each order is $40. In order to minimize the total inventory cost, Steve’s Tire needs to increase the amount of the high demand products and decrease the low demand safety level. By doing the recommendations above, Steve’s Tire can avoid the extra order cost and the wasted inventory

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