The company has a minimum paperwork system. A sales slip listing the part numbers and quantities sold to a customer is generally made out for each sale. If the assembly department wants some items that are not available on the floor, someone will enter the stockroom and get the material. There is no paperwork made out for the items needed on the assembly floor. There were 768 different part numbers purchased for stock last year and those purchases cost $321,461. Inventory records shows that $190,249 was spent on just 135 of the part numbers. Fortunately for Fun Ltd, most of the items they purchase are stocked by either the manufacturer or by a wholesaler. When it is discovered that the company is out of stock on an item, it generally takes only two or three days to replenish the stock. Due to the companyâs recent losses, the bank and auditing firm are concerned about the companyâs ability to continue in business. Recently, the company sold off excess vacant land adjoining its manufacturing facility to generate cash, in order to meet its financial obligations. New CEO and President have been appointed this year. This President has identified many problem areas, one of which is improper inventory control. You, an expert, are invited to help the company.

What do you think should be implemented?