Bill Simpson from the engineering is distraught over a significant price increase for capacitors. Bill confronted the purchasing manager, Mike Watkins, about the situation. Mike Watkins is the director of purchasing for Swisher Systems Corporation. Mr. Watkins is solely responsible for the purchasing activities throughout the company. Swisher Systems is an industrial heating products company that was established in 1949. The company is an innovator of flexible heating products, especially with its knit and braided heating elements. This heating element is a multi-stranded resistance wire that is knit and braided with fiberglass and is the base technology for almost all of Swisher Systems products. The company also produces control devices and heating cables and is known throughout the industry as being a high quality flexible heating product supplier. They have several patents that support the company in sustaining market share. Swisher Systems competitive advantage stems from product quality, which is able to maintain higher, safer temperatures that are more flexible than other products on the market.

Todd Evans, a summer purchasing intern with Swisher, was assigned to shadow Mr. Watkins.

1. Evaluate the current inventory control system at Swisher. How are order quantities determined? If needed, what changes do you recommend?