Q1: Problems of Scientific Glass in 2010

Scientific Glassware is a fast-growing, privately held company that provides specialized

glassware for laboratory and research facilities. The company has observed different

problems during past year and now in 2010 Issues relevant to Excess inventory is tying up

extra capital needed to fund the company's expansion plans. The newly hired Manager of

Inventory Planning is tasked with developing an effective strategy for managing inventory

without requiring additional capital investment.

Utilizing the background information on past exercises of the company to remove stocks

piling, interviews were taken. The company has observed an increasing pattern in inventory

levels. For a developing organization in a developing market, this high inventory level, in

other words tied up cash in the stock, makes an obstruction for this organization to utilize this

additional capital on other zones, for example, extension to worldwide markets. Additionally,

debt to capital ratio exceeded the target level of 40% and if this proportion sustained

jeopardize the organization's operational development arrangements to worldwide markets.

However, other problems are also found in the content, these specified two were the most

basic ones and it is believed that if they are resolved others will eventually be resolved

automatically.

The company is facing competitive pressure as Thermo Fischer Scientific, a direct competitor

is providing a full range of lab equipment and specialized laboratory glass ware. Most

competitors now offered the same types of features that SG has helped to pioneer, so it’s a

threat for the company to overlook this challenge. Moreover the company has decided that its

distribution partners be in Europe and Asia-Pacific region, primarily due to the difficulty

associated with managing an overseas sales and distribution function. Moreover the company

had a fill rate of 99% above industry average of 92% which is creating problem for the

company. Inventory turnover must be analysed as it is an essential problem for the company.

Ware house managers are also exceeding the upper limit of supply.