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As a result the division's inventory carrying cost and the net cost to the company are greater than they should be. This situation can be averted by, bringing the purchasing function under the preview of the division and the "Purchaser" answerable to the divisional Vice President. Another aspect of the supply chain that needs correction is the distribution of finished goods. Presently, deliveries are routed through the NAW at St. Louis. There are two problems with this. The first is that it adds to the cost because of double handling and the second is that NAW manager reports to the automotive division vice president and therefore pays less attention to this division...
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