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The reduction of working capital through changes in the quotation process

Kruize, Kirsten Jasmijn (2014) The reduction of working capital through changes in the quotation process.

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Abstract:The quotation process of company X is not integrated in the ERP system, Isah. The connection between the material requirements and inventory planning lacks, resulting in high stock levels and working capital. Following research question is studied: "To what extent can changes in the quotation process make contribution to the reduction of the working capital of company X in the short term?". Company X is recommended to continue working with Isah. RFQ’s can be filtered to determine whether a quotation will be prepared. Collaboration with other departments can support the generation of quotations with a realistic costs price. The sales departments should enter quotation data in Isah to allow that other departments can act on it. Material management can act on quotations with scorings chances of 75% and higher, with regard to planning and negotiation with suppliers. If the order is received, JIT purchasing can be started. Company X should ensure that customer payments are received before paying suppliers. Customers have to pay standard in 30 days. Payments to suppliers must be done after 60 days, but be careful with payments to critical suppliers. A tight purchase policy resulting in restricted inventories. Limited inventories combined with the payment conditions support working capital reduction. Inventories can be further reduced with 10% when focusing on stationary stock, resulting in 17% working capital reduction.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/64692
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